• Tweet

• Tweet

Fixed Mortgage Rates Plummet To New Historic Lows

Get ready for an early holiday present, dear consumers.

In an effort to breathe life into the struggling American economy, the Federal Reserve made an announcement Tuesday to spend another $800 billion trying to revive the mortgage market. Nearly $600 billion is intended for buying the debts of mortgage giants Fannie Mae, Freddie Mac and Ginnie Mae. The overall hope in this action is to lower costs for lenders who can then pass the savings onto consumers in the form of lower rates.

Some of the finger-crossing paid off. Nearly immediately, there was a dramatic drop in mortgage rates, with some fixed rates decreasing more than 1 point.

The long-term effect is still unknown and some experts are unwilling to make predictions, given the failed previous efforts to stabilize the markets. The one sure lesson over the last year is that the American economy is in a historic place and largely unpredictable.

A portion of the $800 billion is earmarked for a $200 billion lending program and the details of that loan program will not be released until February. In some cases, the simple act of announcing (promising) funds to loosen credit is enough. This program, coupled with the Fed’s plan to purchase Fannie/Freddie’s debt, was enough of a jolt to send mortgage interest rates sliding.

What about last month’s bailout?

Some of you may be questioning what happened to the last multi-billion dollar package aimed at mortgage lenders and struggling banks. Treasury Secretary Henry Paulson told press conference attendees that without the previous plan, the economy could be in an even worse place than it is presently.

“I wish, and I know everybody wishes, that one piece of legislation, and then magically the credit markets would unfreeze,” he said. “That’s not the type of situation we’re dealing with.”

Consumers Can Lock In Low Fixed Mortgage Rates

If you’re considering a mortgage refinance or buying a home, well, your timing is impeccable. Mortgage rates have dropped historically and many consumers are taking advantage by locking in low fixed mortgage rates. Talk to a Home Loan Expert today and find out if this historic mortgage rate drop can help you with your mortgage refinance or new home purchase. One word of caution and an emphasis on volatility – it’s unclear how long these low mortgage rates will last, so move quickly.

Check back to Quicken Loans Mortgage News for updates as we continue to monitor the changes in the mortgage and housing industry.

Related Info

• Get today’s mortgage rates.
• Find the right mortgage refinance loan for you.
• Find the right home loan mortgage for your new home purchase.

 Printer Friendly Version