My New Blog

Hello,

Periodically I like to share a newsletter or an article that is helpful and informative. This is the latest from Cherie McKeage of Capital Funding.

If you are interested in working with Cherie and myself please give me a call at 773-604-7111 x231.

CHANGE IS EVERYWHERE!

The recent election resulted in a resounding change of our elected officials and Americans are hoping for positive change in several areas, including the current economic situation. In the meantime, the economic recovery plan in place continues to implement changes designed to improve financial aspects, including credit and lending stances. Last week, the Federal Reserve announced it will buy a substantial amount of mortgage backed securities in the conforming market, such as those purchased by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Corporation).

This was received optimistically and enthusiastically by the bond market, and as a result, mortgage rates went even lower than they had been previously. The market is looking for signs to begin recovery, and as you know, it tends to react to fear or optimism, as much as fact and reality. All in all, the better investors feel about the direction of the government and its policies, the better the markets will react. People still want to buy houses and banks still want to lend money-they are just looking for a little confidence boost to say now is a great time to move forward.

Home affordability is the best it's been in several years, and that allows people who couldn't afford to buy in the past, the opportunity to do so now. I think banks have learned from their recent mistakes and understand the old standard of borrowers able to qualify for a mortgage three to four times their gross taxable income is still the best stance, rather than the nine times their income to mortgage amount that occurred in 2005 underwriting standards.

Solid financial rules still are the best over time, whether it is in lending or stock investing-and the market will eventually come to ground and make sense again. Better times are on the horizon, and those borrowers and lenders who understand that will be posed to take advantage of it. Have a wonderful holiday season, and if you or your friends have mortgage questions, give me a call. I'm able and happy to help.