How Low Will They Go?


Conforming interest rates are the lowest they have been in 4 years! And there has been much talk on both the network news and in print of the Federal Reserve lowering the rate to zero percent. Now, don’t get too excited – this does not mean that you and I can get loans for zero percent. This Fed Rate is the rate that banks charge each other.

This appears to be in step with the Federal Reserve’s desire to get the mortgage interest rates down to a target of 4.5% before the next wave of mortgage resets. This will allow borrowers to refinance at a much more affordable rate thereby avoiding short sales and foreclosures.

Actually you can get 4.25% conforming loans right now if you want to pay 3 points (not too many do). We will probably see 4.5% with one loan point for conforming loans soon. Now, if we can get the Fed to invest in jumbo loans (the Treasury has been buying conforming mortgage backed securities) it will help Palos Verdes real estate.

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