Some really big news for mortgage rates today. The government has announced a plan to shore up and guaranty billions of mortgage debt and this has a triggered a rally and boost of confidence in the mortgage backed securities market. This has had an immediate effect on 30 year fixed rates dropping them down to levels we had hoped would have been reached by now and currently in the 5.5% range. This could be the beginning of a rally that could take us down to levels we saw in 2003 however the market could also be volatile moving forward.

As a result, some suggestions:

Reach out to your buyers who are sitting on the sideline, this dip in rates has just made buying a home even more affordable. Prices are down and rates are too.

For your past clients, if you are reaching out to them with market updates and information, a suggestion to refinance may be in order. However, their present value will be crucial in determining whether a refinance is right for them. A client who may have a rate over 6% and put 20% down just a year or more ago unfortunately may no longer have the same 20% equity. Therefore PMI might become a requirement and thereby negate the benefits of the lower rate. Additionally, many homeowners have a first and second mortgage. Attempting to wrap both loans into one or subordinating the 2nd mortgage behind a new first lien can also have some snags.

I will be reaching out to many of the clients we share and taking every precaution before embarking on the refinance process with them to ensure it will be a safe and sound financial move for them. Many of the less seasoned originators out there will soon be saturating the market with refinance offers and not necessarily be keeping this component in mind when taking applications. Once an application is taken and processed, there is almost always a cancellation fee if the loan does not close. Proper care and precaution should be taken by anyone attempting to do a refinance as there are numerous changes to the guidelines now if effect that were not just few months ago.

We are ready to assist you with new buyers and past clients in making the right mortgage decision.

Happy Thanksgiving!

Mike Fagan

(410) 218-2030 office

(410) 461-7608 fax

mike.fagan@mortgagefamily.com

PHH Home Loans

10050 Baltimore National Pike

Ellicott City, MD 21042

Contact Hollie with Pakulla Professionals and Re/Max Advantage at 410.952.8964 or visit www.SellsHomesForYou.com