Refinancing Loans May be Getting Cheaper
The Federal government recently announced a program aimed at loosening the credit liquidity crisis in the US. The Fed announced that it would spend $500 billion to purchase mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.
This could be a huge benefit for those refinancing loans in the near future as rates could dip from one-half to one full points from the current refinance rates. If this drop does occur, it could help not only those refinancing, but those looking to purchase new homes. The overall effect could mean an end to declining home prices and a much needed stabilization in the housing market.