4.5% Rates? Dec 12, 2008 Real Estate Report for Oregon & Vancouver Washington

...from The Desk of Ed Bisquera Mortgage Express

The 4.5% Solution

Nothing gets the markets more excited than the government talking about lowering rates to record levels. Ever since the Treasury floated a plan that would have the government buying loans at 4.5%, it has caused a stir that we have not seen for some time in the real estate markets. Many questions remain. For example, who would be eligible for these loans? Preliminary information would indicate that these loans would be for purchases only. The government could also restrict these loans to those with good credit, first-time buyers and/or low-to-moderate income buyers.

The most important question is, what would this plan do for interest rates on other loans? We already have that answer. Rates are going lower and have hit a level seen only a few times in the past several decades. Why? The government backing loans on real estate gives the markets confidence. So, in essence, the markets are already reacting to the possibility and the general public can already take advantage of these great rates. Keep in mind that it is not a certainty that the proposal will even come to fruition. But who cares about that when we have rates that are prompting many to act right now?

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