Bad Credit Home Loan

The Federal Reserve has implied they will lower interest rates through buying home loan bonds (long term treasury bonds) over the next few weeks which should mean good news and lower rates for homeowners in the market for a purchase or refinance. For the third day in a row Yields tied to Fannie Mae and Freddie Mac mortgage loans fell from a six month peak. Information from reliable sources shows current Fannie mae yeilds on it’s 30 year fix mortgages have declined over a whopping 0.20% resulting in a 4.69% rate. This is the lowest rate since early June for mortgage bonds.

Since latter part of May 2009, rates are still significantly higher, 3.94% to be exact. United States Mortgage borrowing rates are being determined by yeilds from agency mortgage bonds. This is due to the 2007 non agency market collapsing and the banks shutting down. This market is made of almost exlusively governement backed mortgage securities.

The U.S. central bank has also promised to acquire up to $ 300 billion of the securities and relieve Fannie Mae, Freddie Mac and the Federal Home Loan Banks of almost $ 200 billion of debt. For homeowner’s worried they may have missed the boat not pulling the trigger on sub 5% refinance and purchase loan rates this gaurantee by the central bank is great news.

The fed is committed to driving the rates back down and stimulating the housing market. If rates were to continue to rise to levels not seen since early 2008 that could spell disaster for the struggling housing market. Already in California there’s almost a year supply of homes backlogged on the market. Besides high interest rates homeowner’s are already having a tough time with the super strict appraisal rules which are becoming a thorn in loan officer’s sides as they try to push through loans in this grueling market.

Jumbo Mortgage Rates