How the US got in to this current mess

http://www.msnbc.msn.com/id/29827248/
'If you had a pulse, we gave you a loan'
Dateline ABC has a decent piece on the current mortgage fiasco. It is well done and a good look into the current crisis on how toxic mortgages work in the system and how they were made/sold. Warning, watching this might make you a little ill.

Rolling Stone Article “The Big Takeover” by Matt Taibbi is a good read on how this current crisis is not about money, but rather power. I found this a story very good and well informed. http://www.msnbc.msn.com/id/29827248/

Wild Day in the market...

What a wild day in the market today. The past week has been a roller coaster in the stock market and housing market. Today, 3-23-09, is no different. First we had Timothy Geithner, the US Sectary of Treasury; announced his plan on how the US government is going to move bad assets off the books of the banks.
Read the article here. http://online.wsj.com/article/SB123776536222709061.html?mod=mktw

The second biggest news of the day comes from the National Association of Realtors.

Existing home sales grew 5.1% in February against expectations for a 0.9%
decline, and following a 5.3% drop in January, according to the National
Association of Realtors

.http://www.mortgagenewsdaily.com/03232009_existing_home_sales.asp

The bottom of the Real Estate market might be in sight. With historically low interest rates and cheap home prices, the market is moving. There are two other variables that might still affect the bottom. The first one is the unemployment rate. If people keep losing jobs, then homes will still come down in price. Second, if banks start to release all of their foreclosures on the market then it will add to the supply and hurt demand, thus triggering lower prices.

Have mortgage rates reached there bottom?

Yesterday mortgage rates fell off a cliff again. They are back in the 4.375% - 4.5% range, down from 5.25%. This large drop was due to the government interaction in the bond the market. A story posted on Marketwatch.com today hints at the theory that mortgage rates might not go any lower then they are today.

“It's hard to make the case for a quantum leap below 5% given everything we are
seeing now," said Nancy Vanden Houten, an economist at Stone & McCarthy
Research Associates. She anticipates rates could hover between 5% and 5.25% for
a while, she said in an interview Tuesday. "I think it's more or less found a
bottom."

Nancy Vanden Houten might be right on this. How much lower can they really go? I’m not sure and I don’t think anyone really does. If you are in the market for a new home or looking to refinance I would suggest that in the next month you think about taking action. One thing is for sure, someday rates will go up and it will be a long time/if ever before they dip below 5% again.

Please contact me if you have any questions!

FHA or VA loan

This article on Bankrate.com is a good read on why a person might consider an FHA loan or VA loan.

If you are a Veteran then the VA mortgage option might be a great choice. Not only can you buy home with no money down, but you also might be able refinance up to 100% of your property value.

If you are not a Veteran then a FHA loan might be a good option for you. These home loans allow you to take out more cash or pay off more debt then a conventional loan. In regards to purchasing a home the FHA loan only requires 3.5% down payment, rather then 5% with conventional. Although, FHA may sound like a great option, it costs a little bit more then a conventional loan.

Please have a mortgage loan officer review your personal situation to find out what product works best for you. Make sure you receive more then a single option from your loan officer, so you can compare the cost between the different types of mortgages and then you will be able to make an educated choice.