I had an interesting conversation with one of my family members today regarding current state of available mortgages. Dino Venti owner of Venti's Cafe in downtown Salem has been building his loyal clientel for nearly 13 years. When you step into Venti's you feel a sense of community among the regulars – it definitely has that "Cheers" type of atmosphere. Having the face to face contact with customers nearly every day for the past 13 years, Dino has established many friends and acquaintances in the Willamette Valley.
More on Do You Understand The Changes?
A couple of weeks ago I mentioned the FHA minimum down payment would be changed to 3.5% effective October 1, 2008. The Department of Housing and Urban Development (HUD) has postponed the change to FHA minimum down payment until January 1, 2009. So for now, the down payment remains at 3%.
More on FHA Down Payment Revision
Today the Federal Open Market Committee unexpectedly lowered the federal funds rate by 50 basis points (.5%) to 1.5%. Several central banks from around the globe also reduced funds rates by 50 basis points in an effort to restore some confidence in the markets. The prime interest rate will be reduced to 4.5%.
More on Feds Lower Fed Funds Rate
The daily media focus on the economy has brought the "banking crisis" to the forefront of everybody's mind. The failure of several large players in the banking system including 158 year old Lehman Brothers and the largest savings and loan bank Washington Mutual, has undoubtedly proven struggles in our banking system. The congressional decision to pass the bailout plan will provide the much needed relief to the banks with a manageable recovery in sight.
More on Yes, You Can Still Get A Loan!
Today the Federal government announced a rescue plan after a historic week in our financial markets. Earlier in the week Lehman Brothers declared bankruptcy, Merrill Lynch was sold, and AIG was bailed out by the government. Central banks from around the world poured hundreds of billions of dollars into the banking system in hopes to calm the storm. Despite the surge of news and volatility in the financial markets this week, mortgage rates had little change.
More on Relief in the midst of a crisis
Tuesday the Federal Reserve Board met and left the federal funds rate unchanged despite the news of Lehman Brothers' bankruptcy and the buy-out of Merrill Lynch. The federal funds rate, which banks charge each other for over-night deposits, will remain at 2%. The prime interest rate will follow suit, remaining at 5%. Consumers are more familiar with the prime interest rate because the rates for home equity loans/lines of credit and credit cards are tied to the prime rate.
More on Federal Reserve leaves fed funds rate unchanged
2008 has brought a large amount of attention to the real estate, mortgage, and financial industries. The media throws information at consumers at a rate that is very difficult to comprehend. Education about the changes we hear from a day to day basis is important as we are all affected by these sectors of our economy. A major topic in the media is the government sponsored FHA home loan. Understanding the basics of the FHA home loan is important as it has become one of the most valuable programs for new and existing homeowners.
More on FHA Goverment Home Loans – Just For First-Time Homebuyers?
My name is Conrad Venti and I am blessed to be in a position to help people build a strong financial foundation. My passion is to educate friends, family, and acquaintances about the importance and benefits of home ownership. Strong Foundation is where I share tips and thoughts about credit, home ownership, and real estate in the Willamette Valley. I am going to shoot to have a new post up on Wednesdays, but will periodically post on other days as well.
More on Up and Running
