May 4, 2009

Low mortgage rates leads to spending boost

Here's some information from the European Press ...
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Record low interest rates allow millions of borrowers to switch to cheaper home loans and this enables US homeowners to save close to $18bn on their mortgage repayments this year.“In aggregate, this adds up to about $2.5bn in extra spending cash in the pockets of those homeowners to spend over the coming year.";says Frank Nothaft, chief economist at Freddie Mac.

Refinancing trends is expected to be boosted by the government’s plans to help more borrowers to qualify for mortgage re-negotiations.This means that this year’s savings for homeowners could reach $18bn.The savings are based on refinancing loans that qualify for backing by Freddie Mac and rival Fannie Mae with a 5 per cent interest rate.

Under the government program, borrowers who have mortgages owned by Fannie Mae or Freddie Mac can refinance without additional mortgage insurance costs, even if the loan is more than 80 per cent of a home’s value.Under the government program, borrowers who have mortgages owned by Fannie Mae or Freddie Mac can refinance without additional mortgage insurance costs, even if the loan is more than 80 per cent of a home’s value.

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