Houston Mortgage Rates go down after "Operation Twist" announcement

The federal reserve is trying to start the engine of our stalling economy by using a strategy from the 1960s. Ben Bernake plan is toThe Federal Reserves’ “Operation Twist” was unveiled today, but the big question is how it will affect Houston Mortgage rates.

Under the plan, the Fed would sell $400 billion in shorter-term Treasury debt in its portfolio and use the proceeds to buy an equal amount of longer-term bonds by the end of June 2012. This is specifically designed to bring stability to the market by pulling down mortgage and longer-term interest rates.

I believe we will see a number of people refinance their mortgage in the months to come due to the action of the Federal Reserve. The real question is will home buyers be enticed enough to purchase a new home.

In my last article, I wrote how purchasing a new home today was a smart thing to do. I even quoted Donald Trump who was calling for people to purchase a new home. In his usual fashion he said, that people would thank him in 10 years. I am telling you that you will.

If you have the means to purchase a new home, I am just going to bust out and say it. You are crazy not to take advantage of the best stimulus for the consumer in the history of our country. It is not a buyer’s market it is a super buyers’ market on steroids.

Houston Mortgage rates give move-up buyers $50,000 increase in home.

Lower Houston Mortgage rates have increased the home buyer’s purchasing power by 25%. That means if you purchase a $250,000 home today your monthly payment would be the about same as buying a $200,000 home just a few short years ago. That is a $50,000 dollar windfall.

I can’t stress the enough the difference between a $250,000 home and a $200,000 here in Houston. One has granite counter tops, hardwood floors, bonus/game room, crown molding, and possibly a pool. The other has no upgrades at all and no pool.

First-time Home buyers- It is time to apply for your Houston Mortgage?

If you are renting and paying more than $1000 a month, you could purchase a $120,000 home for $1056.23. That includes your taxes, insurance, mortgage insurance, and principal and interest. That is the whole enchilada. Your down payment would only be $4,200 and we can have the seller pay all your closing costs. If you are a veteran you don’t have to put any money down. Got Bad Credit? No problem, I can refer you to a firm that has been featured on Fox Business News that can repair your credit. The key is to start now.

I am screaming right now. This is as good as it gets. I am going out on a limb here by saying you will never again have an opportunity like today to purchase a new home. Don’t be the one that regretted not taking advantage of these low Houston mortgage rates.

FHA mortgages provide financing for many Americans today. Since the mortgage crisis, we have seen a huge number of mortgage programs eliminated and conventional loans have drastically tightened up their lending guidelines. making it more difficult for families to obtain financing for a home.

Although, FHA loans now require a minimum credit score of 640 and the down payment has increased to 3.5% it is still much easier to get approved on an FHA Mortgage than a conventional loan program. More importantly, the interest rates are currently lower than conventional mortgages allowing more people to qualify and get approved. So how is FHA loans good for your kids?

Well a recent study shows that children of renters are 40% more likely to give birth as unmarried teenagers, and almost twice as likely to be idle at age twenty and rely on food stamps. In addition, thier high school graduation rate is 19% lower and they are half as likely to acquire any post-secondary education. They tend to make $1.00 less per hour than children of parents that own a home. What is truly amazing is homeownership had a more positive effect on lower income families than higher income homeowners.

FHA Mortgages have a variety of ways to help families purchase a home. They can get 100% gift from a family member, non-profit organization, or employer for their down payment and closing costs. They can use "Mattress Money" (money saved at home and not seasoned in a bank account) submitted with a monthly budget demonstrating that the client could have reasonably saved the needed funds.

Also, a client can close on a loan using income from a job he/she has not yet started as long as the offer letter states that the client will start no later than 60 days after closing and can provide an offer of employment letter. This is great for relocation buyers who are trying to purchase a new home prior to moving and starting their new job. So as you can see FHA Loans help clients purchase homes and that helps their children be more successful.

Phil Himes

Managing Director

Augusta Mortgage Company, LLC

phil@augustamortgageco.com