Fannie Mae and Freddie Mac Bailout - What does this mean for interest rates?

Lower mortgage rates, more than likely!


The below is from this recent news article:
"Sunday's federal takeover of Fannie Mae and Freddie Mac will likely translate into lower mortgage rates and greater availability of credit, experts said. Rates could drop by 1 percentage point from the stubbornly-high 6.39% for a 30-year fixed rate mortgage."This could be good for would-be homeowners," said Tom LaMalfa, managing director, Wholesale Access, a research and consulting firm. "It would reduce the cost of financing at the new and improved Fannie and Freddie."

"The government bailout is aimed at making mortgages easier to obtain and afford. By shoring up the mortgage financing giants, they can continue buying mortgages from lenders and injecting much-needed cash into the system."

"Fannie Mae and Freddie Mac are crucial to turning the corner on housing," said Treasury Henry Paulson. "Therefore, the primary mission of these enterprises now will be to proactively work to increase the availability of mortgage finance. Our economy and our markets will not recover until the bulk of this housing correction is behind us."

This is definitely encouraging news for those who are thinking of purchasing a new home. As always, we are here to help and answer any questions you might have about the home-buying process. Feel free to contact us!

Regards,
Chuck & Cindy
ChuckandCindy.com

Chuck Hinton: (919) 422-4841
Chuck@ChuckandCindy.com

Cindy Leonard: (919) 868-4661
Cindy@ChuckandCindy.com