What Recent Changes In The Financial Markets Mean To You: Lock. Now.

Posted by Justin McHood on September 22nd, 2008

What an interesting time to “unplug”.  I have been “out-of-pocket” for about a week and a half and during that time, more happened in the financial markets than could be explained in a single post.

But, in case you missed it, During the last couple of weeks, some of the major changes in the financial markets included:

Lehman Brothers filed for bankruptcy

AIG was bailed out by the Federal Government

Bank of America bought Merrill Lynch

Treasury Secretary Hank Paulson announced that the US government will temporarily guarantee money market funds

Congress is planning on giving Treasury Secretary Hank Paulson a line of credit that he can use to purchase up to 700 Billion of “bad mortgage debt” at any one time.  (Note the part in section 6 of the Treasury’s proposal where it says that the maximum amount is 700 Billion at any one time — meaning it is possible to buy and sell, buy and sell TRILLIONS if Hank Paulson decides to”)

And those are just the highlights!

So what does all of this mean to you if you are currently trying to refinance your existing home or purchase a new one?

I don’t know for sure…

But if someone says that they know that guidelines are going to get easier and rates are going to be lower in the future, they must know something that we don’t.

The trend has been that guidelines are getting tougher during the last year or so and when I look into my crystal ball, I don’t see them getting easier anytime soon.

And guidelines matter more than rates.

As far as rates?

They may go lower, they may go higher — but — if you control the downside risk, the upside rewards will generally take care of itself — so we are coaching our clients to lock now if they have a loan in process.

And hold on for a wild-financial-ride over the coming months as the dust settles from all of the recent changes.



September 22, 2008 | Filed Under Interest Rates, The Business of Mortgages 

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One Response to “What Recent Changes In The Financial Markets Mean To You: Lock. Now.”

  1. Arizona Mortgage Rates Roundup October 3, 2008 — Phoenix Area Real Estate Blog on October 3rd, 2008

    [...] We are still advising our clients to lock their rates as soon as possible. [...]

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