Loudoun Mortgage Rate Round-Up – November 28, 2008

If you're a home buyer right now, you're loving life. Prices are down and mortgage rates have  plummeted over the last few weeks. The national average is back under 6 percent - 5.91 percent with .13 in discount and origination points, to be exact.

Locally, rates tend to be slightly better with the 30-year fixed rate mortgage being around 5.8 percent with .13 in points (as of Wednesday). But, one of my buyer clients was just quoted 5.875 with no points and no origination fee…on a "jumbo-conforming" loan (above $417,000). The fact that it's a jumbo-conforming loan at that rate with no points is huge! (Those types of loans usually cost .25 to .75 more in interest than "conforming loans")

The reason for the plumetting interest rates? The effect of the Fed bail-out and continued influx of money into the credit markets is finally being felt. The move on Tuesday by the Federal Reserve to buy $500 billion of mortgage-backed securities over the next year and a half also helped. In fact, immediately after the Federal Reserve made the announcement on Tuesday, rates fell to as low as 5.25 before coming back up to just below 6 percent.

A drop in rates is exactly what the Fed was aiming for. In its announcement, the Fed said,

"This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally."

If you're looking to buy real estate or refinance right now, you're sitting in a great seat when it comes to interest rates.

Source: Bankrate.com