Freddie Mac announced Thursday that home loan interest rates for 30 year fixed rate mortgages increased to 6.32 percent this week, the highest it has been in more than eight months. The increase is said to be attributed to growing inflation concerns. The 15 year fixed rate mortgage also jumped, averaging 5.93 percent compared to 5.65 last week.
Top officials at Freddie mac said that Federal Reserve officials specifically indicated that the threat of inflation was the primary reason for the increase, and that it looks as though the Federal Reserve will raise interest rates more aggressively over the next year than previously thought.
Mortgage applications rose by about 10 percent from the lowest level in 6 years. home loan refinancing applications jumped from 8.4 percent while purchase applications rose 12.8 percent. Top officials at the National Association of Realtors say that regions of the country that have seen sharp price declines are now seeing a sales recovery, due to a large influx of bargain hunters.
Meanwhile, mortgage delinquencies and foreclosures continue to rise at a record high rate. Experts agree that part of the reason that applications are on the rise is because homeowners that are in over their head in debt are attempting to refinance Home loan.
Buy or Sell Real Estate
Interest Rates Hit an Eight Month High
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Lenders Must Place More Emphasis on Targetted Marketting
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The bottom line from the instability of the sub prime lending market is that sub-prime lenders, in their haste to show profit, were lending to people that had no business getting loans in the first place, because they were practically guaranteed to get a FHA loan bail out if the borrowers defaulted. Don't be surprised to hear many big name lenders go out of business when the government finally decides to discontinue these bail outs. What this means in the short term, is that the lending market will become much tighter, and the requirements and standards to be able to get loans will be much higher.
With higher requirements, that means that there will be more less customers (borrowers) to go around, making the importance of targeted direct mail and other direct marketing paramount to lenders. The lending market is sure to become a very, very competitive market, and lenders will have to place an increased emphasis on their marketing techniques, targeting specific demographics, in order to gain marketshare. Lenders will need to reply more heavily on bringing in borrowers that actually qualify for a loan, rather than picking up any stiff up off the street, brushing him off, and handing him a loan for a quarter million dollars. |
Tips for Selling Your Waterfront Home
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With Real Estate prices coming back down to earth, one sector of the market which seems to be retaining it's value relatively well is Waterfront Real Estate. That being said, if you are looking to sell your waterfront property, here are a few tips to maximize your selling price potential. First, pay particular attention to any decks and docks. Replace broken boards, power wash and water treat them for maximum effect. Next, make sure to clean up any sand beach areas by cleaning out any weeds. Also consider sprucing up the waterfront by strategically placing plants and flowers.
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