Wondering where is your bailout- why not? every other mega-billion dollar financial institution is getting their’s. The U.S. Treasury is offering a little present, just in time for the holidays.
The federal government announced that it will pump some $600 billion into the mortgage market — purchasing up to $100 billion of Fannie Mae and Freddie Mac debt and up to $500 billion in mortgage-backed securities. This action caused the average mortgage rate drop below 6%.
For those able to refinance, this is great news. It may mean some serious extra cash in hand each month, to be used to shore up retirement savings, pay down debt, maybe even afford a few more holiday gifts this year.
Now, for those that have not been paying their loans on time or owe more than what the property is worth, this present will more than likely not come to you.
Getting a loan may still prove difficult for some, even those who aren’t under water on their mortgage loans, given stricter underwriting standards. Still, a refinancing rush is on the way.
Low rates, combined with the decline in home prices is nudging more home buyers into the market. Homes certainly are looking more affordable in many places — that is, for first-time homebuyers (who shouldn’t forget the $7,500 tax credit available to them for purchases between April 8, 2008, and July 1, 2009). Current homeowners eager to buy, on the other hand, well, would have to try to sell into this market, good luck!
