It is starting to trickle down?
A question that comes up when talking about today’s housing market is if the recent economic stimulus packages and federal bailouts that we are all paying for will actually help the average homeowner. I wish I could tell you that I understand how it all is suppose to work. You wonder how pumping billions of dollars of taxpayer dollars into bleeding financial institutions will actually trickle down and help average hard working families who are struggling to keep ahead of their daily expenses and keep a roof over their family’s heads. I can’t tell you how it is all suppose to work but I can tell you that I can now see it on my newest mortgage statement.
I have an adjustable loan. Like many of my clients my wife and I had to stretch ourselves to buy a home in the neighborhood that we wanted to live in. To do that we choose a 30 year adjustable loan with the first 5 years fixed at 5.75%, a good interest rate at the time, and payments we could afford. Like many others the economic downturn has had an effect on our income and we were a little worried about staying ahead of our house payments. Well the adjustment period on our loan just came due this April and guess what, it has adjusted to 4.0%, that is a $500 dollar a month savings for us. I still have a smile on my face. By understanding what needs to be done to help keep interest rates low during an economic downturn the Federal Reserve has helped keep my home affordable; thank you.
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7 Responses to “It is starting to trickle down?”
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Nice story Mark, and an often overlooked part of the adjustable rate mortgage programs; the rates go both ways, up and down. For some families this can also be the right time to refinance their existing adjustable loan to a long term fixed rate, maybe at a rate a bit higher than the lower adjustable, but as mentioned rates do go both ways over the long term. Best advise for the consumer, check with a professional loan consultant, and if you do not know anyone ask your professional Realtor for a referral
Mark,
Great comment and what good news for you.
Cause and effect at work.
Brian
Hi Mark,
Thanks for sharing, I have not heard from many people about their payments actually going down. Great news for you. Keep up the great work and good luck to you in the future.
Hi Mark,
I think that Michael hit the nail on the head, but as you said, there has been some positive changes that have taken place, and I am glad that you were able to take advantage of those changes.
Jonathan
Having an adjustable rate mortgage in the past few years has really been an advantage!
Larry
Mark…
Your comments were a very much needed reminder that not every adjustable mortgage was a bad thing.
I’m so happy that everything worked out for you!
Mark,
Wasn’t that a pleasant surprise to receive notice of lower payments. It is happening a lot.
I am concerned for people drawing on their equity because they are so low. As we all know everything that goes down must go up and the interest rates on the equity lines will do that in time.
Speaking about the Trickle Down affect. I was speaking with an engineer with the City of Pacifica recently. They have a major road paving project getting off the ground very soon because of the Fed’s money. I hope they are going to hire local people to do the work and we possibly could get one or two new home buyers or keep one or two from losing their homes. Does anyone know of other local city projects funded by the fed. What goes around comes around?