Falling Home Prices and Cheaper Mortgage Rates - Your Dream Home a Reality Now

The loss in the housing sector was almost crippling the credit market. Banks are not lending each other fearing a bundle of bad stocks in exchange, which further requires admitting their bad debt, damaging their credit rating. A fall in the credit rating will make it just impossible for them to raise funds to stay back in business. The Federal Reserve pumped in money to increase the liquidity. It was later realized that the need for credibility was the reason behind all the havoc and created a super fund for purchasing bad mortgages, alas, it was too late a decision to stop the cascading effect.



Cheaper Mortgages Rates now make your Dream Home a reality



While the impact of financial meltdown is certainly disastrous, it has indirectly helped certain sections of the society. One of the common areas which has seen the advantage is Home Loan Mortgages. Banks literally stopped lending; thanks to the intervention of Federal Reserve which pumped in billions of dollars by purchasing mortgage rates backed securities guaranteed by Freddie Mac and Fannies Mae and reduced the interest as low as 4.



5 percent to keep the credit market moving. It has resulted in the lending rates falling below the historical rates in turn reducing the cost of borrowing. Home prices have fallen with no demand. This has offered tremendous opportunity for home buyers even in such challenging circumstances, to reduce their liabilities and purchase a home at almost half of its original cost of borrowing. In short, it is a dream come reality, where you can afford to own a house in times of severe credit crunch.



Current Housing Markets:



Housing market is finally getting some relief, with lower mortgage rates encouraging refinancing.



Home owners who are facing a credit crunch and are unable to meet their liabilities call it a positive change. Refinancing their existing home loan liability with the recently changed home loan rates helps them to not just reduce their monthly liability, but also the impact of their home loan rates with reduced cost of borrowing together with savings for the future. Those borrowers who have a good credit score and a home which has not lost much of its value, find the reduced rates really profitable with more money available for other expenses.



With a fall in interest rates more people are eligible for refinance loans, as their principal and interest payments have fallen.