We are witnessing history. Mortgage rates are at their lowest levels in over 40 years! This is in large part due to the Federal Reserve Bank and the U.S. Treasury purchasing Mortgage Backed Securities (MBS) as part of the “bail out” plan approved late last year. We are speculating that the Fed and Treasury will purchase about $80 billion of MBS monthly until they reach their limit of $500 billion. This should lead to 30 year fixed rates hovering on either side of 5% for the next few months. There has never been a better time to finance a home in a generation, so don’t wait: act now!

Happy New Year Everyone-
I hope you all are as excited to be in 2009. We finally feel that we have some positive news to carry us through the first couple quarters of ‘09. The Treasury has started buying MBS this week and plan to buy up to $500 billion by the end of the second quarter. This program is aimed at driving down the price of mortgages and making home loan more available. This is GREAT news for us. Rates should remain LOW for the first 2 quarters if not longer.

To give a quick update on some things we have seen change with the new year:
Conventional:
• Couple guideline changes. The main thing we are seeing is 2nd homes will be limited to 90% LTV for Purchase and RT.
• MI companies are no longer insuring 97% loans effective 2/1/09.

FHA:
• HUD has announced that any cash out LTV > 85% will now require 2 appraisals effective on all case numbers ordered after 1/1/09.
• Max loan limits for 2009 have been set. It appears majority of Ga has gone to $320,850. You can access this by going to https://entp.hud.gov/idapp/html/hicostlook.cfm
• Max LTV is now 96.50%

It is a great time to finance a home!!! Dealing with the right lender will make the process much more enjoyable!!!