Your Home Mortgage and the New Administration
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by: marciafreeman
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The inauguration of Barack Obama, the 44th President of the United States, ushered in a new era of hope. People let go of their despair over the current economic woes and embraced the celebration in various ways. President Obama carries the weight of the state of the economy into week two of his administration. More people are out of work and consumer confidence is low. The new administration not only pledges to rework the $700B Troubled Asset Relief Program offered to the financial sector, but also to help families and small businesses. It plans to offer low home mortgage rates in the hopes that it will help boost the ailing housing market. The drop in home mortgage rates have been a welcome change for those hoping to refinance or purchase a new home. For those with good credit, now is the time to secure the lowest interest rates on a home mortgage the country has seen since the 1970s.
As of the second week of January, the Federal Reserve kept its rates hovering around 0 percent. When those rates are low, it means interest rates for consumer loans and mortgages will also be low. The low home mortgage rates are, however, accompanied by tighter lending standards. Lending institutions and banks do not want risky borrowers. They are requiring higher credit scores, bigger down payments and cleaner credit histories. So borrowers who may have qualified for a home mortgage last year, may not now. Current homeowners who are considering refinancing a home mortgage will have to meet stricter guidelines too. In many areas of the country, homeowners have lost equity from a drop in values and are struggling to lower their home mortgage payments. That makes refinancing extremely difficult, since banks are now requiring that consumers have higher percentages of equity to qualify.
Many predict that inflation will make interest rates slowly creep back up. Consumers who have good credit scores and solid credit reports are not taking any chances and are seizing the opportunity to secure low home mortgage rates, particularly for refinancing. The savings accrued by lower monthly home mortgage payments can be enough to help many consumers weather the economic storm.
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