Cape Coral Florida's Real Estate Guide

Mortgage rates have been falling recently. If you, like many homeowners today, are wondering how you can take advantage of these new, low rates pay close attention. Consider refinancing your home to get a lower mortgage rate on your Cape Coral home. Refinancing is like buying your home all over again so many of the requirements you needed to meet in order to purchase your home will need to be met in order to refinance.

First of all, you will need credit. A score of 760 or higher will ensure that you get the best mortgage rate available. You will also need proof of income. If you have become unemployed recently, you will need to establish new employment in order to refinance. Lastly, you will need collateral in the form of equity in your home. If you can meet all of these requirements, then you should take the next step and talk to your mortgage lender about refinancing your home. It could mean a huge savings for you and make your home that much affordable to you.

Congressional democrats are mad and they are letting the U.S. Treasury know it. The $700 billion dollars granted to Congress in an effort to stem a full-fledged economic meltdown has been used in appropriately, claim some members of Congress. They feel money was freely given to banks and other large financial institutions with no substantial aid given to struggling homeowners. House democrats are demanding that the Treasury commit to the rollout of a massive loan modification plan if they want to have access to any more of the bailout money.

With $350 billion dollars hanging in the balance, the Treasury has taken action and begun to work on a loan modification plan. Some democrats want to make the Treasury implement the loan modification plan proposed by FDIC Chairwoman Shelia Bair. Her proposal is to systematically reduce mortgage payments and soften loan terms for homeowners struggling to keep up with their mortgage payments. Those who oppose this plan say this would cost billions and may not really help reduce foreclosure rates. It is a fact that over half of homeowners that receive modifications to their home loans default on the modified mortgage within six months. Plan supporters feel that by not just lowering interest rates, but actually reducing the balance of the loan, a more successful modification can be made that will have lasting results. That, and the fact that a federal guarantee is built into the plan to protect lenders in the event that homeowners redefault on their mortgages, helps to make this plan more attractive to all parties involved.

It is hard to say whether loan modification would be the best way to solve the housing crisis, especially without it ever being done on a large scale as proposed by Congress. What is true, however, is that any help is welcomed by the homeowners who are hurting and it could be one of many tactics used to help stimulate the housing market and the economy overall.

For the past month, the National Association of Realtors and the National Association of Home Builders have been pushing a plan for a wide-scale mortgage rate reduction plan to be provided by the U.S Treasury. Sure it will mean more affordable home loans but there are many other benefits to this plan. The main goal of a mortgage rate reduction plan will be to push large amounts of people into the real estate market in order to drastically reduce the existing home inventory and spur a need for new construction. By doing so, home prices will stabilize and a very important part of the economy will be strengthened.

Additionally, other industries will benefit from a sharp increase in home sales. When people buy homes they buy new things for their homes like furniture and appliances. Those industries will be flooded with new sales, spurring the creation of new jobs in those sectors. This is not the first time a plan of this kind has been used to overcome tough economic times. Back in the 1970's, The Tandem Plan was used to get the housing market out of a slump. Plan proposals for today vary and some even have the government making money by enacting a rate reduction plan.

A rate reduction plan is very necessary to help revive our economy. It may very well provide an instant remedy for many of the issues plaguing our economy today and will allow more people in the U.S. to become homeowners. Rates are low today in the mid-fives but a more significant decrease may be the answer we have been looking for.

Last quarter, Fannie Mae and Freddie Mac posted multi-billion dollar losses. This scared investors and triggered them to require ultra high premium returns in exchange for buying the Fannie/Freddie debt. So what did that mean for the real estate & mortgage markets? Well, mortgage rates increased to above 6%, stifling new and existing home sales.  Luckily, the U.S. government stepped in and reassured investors that their backing of Fannie Mae and Freddie Mac is no joke, causing investors to relax and take lower premiums. Lower premiums for investors mean savings on mortgage rates for home buyers like you. Let's take a look at the current mortgage rates.

Currently, the rate for a 30 year fixed rate mortgage is 5.47% and the rate for a 15 year fixed rate mortgage is 5.13%. Rates for a 30 year fixed rate mortgage have dropped by a full half of a percentage point! With rates in the 5% range and home prices at an all-time low, many people understand that this is the time to buy and/or invest in real estate. People have already begun to take advantage of this situation-mortgage applications are on the rise. There has been a 37% increase in conventional loan applications and a 39% increase in FHA-insured loan applications according to the Mortgage Bankers Association.

As I have said before, now is the time to buy real estate in Cape Coral. Now that mortgage rates are at an affordable level, there is no better time to take advantage of the current real estate market. Beautiful homes in Cape Coral, Ft. Myers, Bonita Springs, and Estero are available for a fraction of prices. Take a look at homes for sale in these areas using the FREE property search provided here or contact me for a personal consultation today!

The U.S. Treasury is constructing a plan to stimulate new and existing home sales by reducing the interest rate on home loans. The current rate will be reduced from the current 5.5% to 4.5% and this reduction would apply to new mortgages on new and existing homes. While a step in the right direction, there are many who are critical of the treasury's proposal.

Industry insiders say that the treasury's plan may hurt current mortgage investors. Others criticize the plan because the rate reduction would only apply to new mortgages and not to refinancing. Those critics say that there will be nothing to stop neighbor's from "trading homes" to get the 4.5% interest rate. Many realtors back this plan because it would mean a jump start for home sales and anything that can get homes sold will help in the current market conditions.

Although there is no date set for a decision on this plan, we can expect to hear more about this in the coming days and weeks. Check back often for more updates.