Historical Low Interest Rates...Great deals on the market.... Best time to buy.... Yes, we've heard it all about this rare great housing opportunity for those who qualify. Just recently, mortgage buyer Freddie Mac said that the average rate on a 30-year fixed rate fell to a record low of 3.4 percent. The Federal Reserves have been working hard this year to encourage more borrowing, spending and refinancing. It works. I'm very motivated to buy if it wasn't for one big obstacle. The Bank.
Banks are now requiring higher credit scores, stricter income documentations (ie. signed documentations from your employer to verify your current and future employment), and larger down payments before approving for loan.
Don't get discourage. The Feds are well aware of the challenges for home buyers and homeowners. During the central bank's October meeting, the Fed may purse more bond purchases, making home-buying more affordable, in the months ahead. Rumor has it that a new program could be announced next month in December 2012. There is no guarantee at this moment, if the Feds could make home buying more affordable, my concern is the fine print.
Federal Reserve Chairman Ben Bernanke said that the housing has shown signs of recovery this year. Still, construction activity, sales and prices remain lower than they were before the crisis. 20 percent of mortgage borrowers remain underwater, meaning that they own more on their mortgage than their home worth.
Only time will tell what the choices Freddie Mac and The Feds will make in the months ahead. In the meantime, I'll keep filling up my "Home Sweet Home" piggy bank.
Source: MercuryNews.com
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