NEVER GOING TO SEE RATES LIKE THIS AGAIN!

I know that in previous newsletters we have discussed how good the rate environment is. However, it is official, we most likely in our lifetimes will never see rates as low as they currently are. Every day, we are pricing loans for clients and sitting in amazement of what we are offering. We have seen pricing as low as 4.5%. The Fed has cut the Federal Funds Rate to .0%-.25%, which in essence means that there is no cost for banks to borrower money from each other. It is virtually impossible for rates to get any lower. We know many believe that if they wait to act, they may be able to take advantage of even lower rates. We want to ensure that we act responsibly and let our current and prospective clients know that this is not the case. The only way that they could improve would be for the banks to begin paying you interest for taking their loans. This concept in theory would be amazing, however not realistic. The Feds move to cut the Federal Funds Rate is basically the last tool they have in their arsenal to heal this economy and it is imperative that we as members of this economy take advantage of it. There are too many homeowners who currently have adjustable rate mortgages or are in need of lowering their current fixed rate payment. If we can begin correcting those potentially problematic loans now, we will be on the road to economic recovery and at the same time secure our financial futures when it comes to living comfortably with our mortgage payment. The payment savings that can be realized when taking advantage of these new low rates can be used for general savings purposes or to end the use of credit cards to pay daily living expenses. This is the trickledown theory that will help heal this economy. This economic crisis began with the subprime meltdown and mortgage defaults and mortgages can be the catalyst that leads us out of these difficult times as long as everyone realizes that now is the time to act and to take advantage of this market.

If you have recently refinanced your mortgage or purchased a home with an FHA loan and feel as if you have missed an opportunity to take advantage of the newly created rate environment, we want you to know that there is way for you to take advantage of these amazing rates. The FHA streamline product was developed to allow homeowners to reduce their monthly principal and interest payments without having to go through the hassle that they most likely went through when they purchased the home or did a cash-out refinance. With this product you will not be able to take out any additional cash but the goal of the streamline is to place you into a more comfortable position with your mortgage payment.



Program Highlights:

- No application Fee

- No Full Credit Check Required

- No Income Qualification

- No Employment Requirements

- No Appraisal Required

- Late Payments OK

- Must Be Current on Mortgage

- Next Mortgage Payment Can be Skipped

- No Closing Cost Option



This is the classic, “it’s too good to be true sale.” The program is designed so that people always end up in a better situation. The calculations involved in this loan are quite simple. Processing takes only a few days before the loan is approved and they are closed within 30 days.

Interest rates have dropped to their lowest levels in 40 years. Today’s 30 year fixed rate average is about 5.125% according to the FHLC. To many families this represents an almost 2% decrease in their current mortgage rate. Also, it offers people that have interest only loans and option arms the ability to convert these types of loans into fixed rate loans with little or no increase in payment.

Fannie Mae and Freddie Mac are beginning to tighten their guide lines on future lending. Minimum credit scores are increasing, thus giving further reasons why you should be considering refinancing your current mortgage now. It may take a few years before we see an increase in home values with many areas of New Jersey still declining in value. Jumbo loans, those in excess of $417,000.00 are feeling tremendous pressure in greater restrictions than ever before. Borrowers in this area should consider the benefits of today’s lower rates and ability to consolidate debt there by reducing their overall cash out lay on a month to month basis.

Last, but not least, home owners who owe more than the current market value of the home should be considering a “short pay off” with their current mortgage company. FHA loans can make this possible with 97.5% financing at extremely attractive interest rates. Retaining legal counsel to represent the home owner to negotiate a reduced pay off is the best way to accomplish this task. Many lenders are willing to accept reduced pay offs rather than facing loses from non-performing loans along with the possibility of filing for foreclosure. Aequor Funding Corp is taking a pro active role in this segment of the industry by our listing on the HELP FOR HOME OWNERS government web site. Call us to learn more about the various ways we can help you reduce your mortgage payments and remain in your home.

In addition to lowering the Discount Rate to unprecedented levels last week, there is an additional measure that the Fed will take to help in our economic recovery. This crucial step may end of being of more importance than the actual lowering of interest rates. They are considering expanding a recently announced program to buy up debt and Mortgage Backed Securities (MBS) from Fannie Mae and Freddie Mac. This is a move that can be felt all the way down to the borrowers applying for mortgages. The reason is that the banks issuing the loans now have more confidence in the fact that they will be able to sell them later down the road. It is the old risk vs. reward theory. If the banks know that they have a source to sell their paper, they will be more apt to lend. In addition they will be more apt to lend at aggressive interest rates. The Fed also announced that they were looking at the possibility of buying long term Treasury Bonds. Both of these announcements have helped to lower rates and return some stability to the markets. As usual, we will keep you posted every step of the way.