Now even traditional mortgages are hard to get
Mar 13th, 2008 by admin
In the market for a new home? Do you have a good credit rating? Even if you do you may find it hard to get a mortgage loan at rates anywhere near the current average (5.96% today). The credit crunch has come home to roost and Mortgage originators are now finding it hard to sell even the best rated loans as securities.
Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart. Some fear this development will make it harder for people, even those with strong credit histories, to get a home loan.
Be prepared to pay more upfront as well. Most borrowers must now but 5% or more down on the cost of their house.
My question is, if even these traditional mortgages are going away? What is going to replace them in order to get the housing market moving again? Until something does, the market will not equalize and home prices will continue to drop. (Read)
Source: John Frost