The Recession and Your Home Mortgage
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by: marciafreeman
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As inauguration festivities lingered in the air, many were hopeful that the new President would get the country back on track. People let go of their despair over the current economic woes and embraced the celebration in various ways. As the President enters his second week in office, the economy is still the most pressing concern. Unemployment rates are on the rise and families continue to struggle to make ends meet. The new team in the White House plans to give a boost to small business owners and regular middle class Americans who are struggling, as well as restructure the stimulus plan introduced by the previous administration. It plans to offer low home mortgage rates in the hopes that it will help boost the ailing housing market. The drop in home mortgage rates have been a welcome change for those hoping to refinance or purchase a new home. For those with good credit, now is the time to secure the lowest interest rates on a home mortgage the country has seen since the 1970s.
As of the second week of January, the Federal Reserve kept its rates hovering around 0 percent. The Fed rate is the rate that banks lend to each other, so translates to lower rates for consumers. The low home mortgage rates are, however, accompanied by tighter lending standards. Lending institutions and banks do not want risky borrowers. Qualified borrowers need to have stellar credit reports and scores and put more money down. That means that fewer consumers are eligible for the lowest home mortgage rates than were just a short year ago. A consumer looking to refinance a home mortgage will be under the same scrutiny as one applying for a home mortgage for the first time. Homeowners in some real estate markets have experienced such a decrease in home prices that many owe more on their home mortgage than the home is worth. That makes refinancing extremely difficult, since banks are now requiring that consumers have higher percentages of equity to qualify.
Many predict that inflation will make interest rates slowly creep back up. Those who qualify would be wise to take advantage of the low rates for a home mortgage refinancing. Money saved by decreased home mortgage bills can provide a cushion during these tough financial times.
Related Topics Refinance home loan Mortgage rate Mortgage Home loan
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