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St Louis Home Loan Experts Are Saying Get Ready For Higher Interest Rates





When the Fed stated that they would stop buying mortgage-backed securities to the tune of $1.25 trillion, the news sent financial chills down the backs of politicians as well as mortgage and real estate professionals nationwide. What was created to help the economy could now put it in its fiscal grave.

The unexpected change of opinion seems to be conclusive that mortgage rates will invariably go up much sooner than originally expected. As far as our economy is concern, when it rains bad news, it certainly floods and probably will devastate the real estate and banking industry.

This sizable purchase plan was as it appeared from the very beginning, a reasonably good government bailout with the potential of bringing this sinking economy back on line. But the good, has now become the bad and the ugly of financial matters.

Many feel this is just another brand new "scare-tactic" on Capitol Hill with the Fed no longer interested in buying security-backed mortgages. The question one must ask is will the central bank start selling them to private investors any time in the next few years?

Experts hope the answer is 'yes.' But the bottom line is, it is now becoming inconsequential whether the Fed sells these mortgages or not. When the cash flow stops and the mortgage-backed securities are no longer bought, this will inevitably cause the mortgage rates to rise.

And for those who have been contemplating buying a new home, you may be inadvertently put into a position of paying at least a quarter to a half percentage point higher for that new home as history has shown. In fact, these lower rates that we have witnessed for the last couple of years may be just that, history.

Now when you add the potential higher rates into the equation along with the April 30th deadline for the home buyer's tax credit, this ending government bailout may spell quite a financial and real estate catastrophe for 2010.

Dean Baker, co-director of the Center for Economic and Policy Research, argues that both the Fed's bailout program and the home buyer's tax credit for potential home buyers practically ended the free fall in home prices.

But what is truly alarming is what this man further predicts. First of all, with no further purchasing of these security-backed mortgages, this may very well cause home values to once again plummet throughout the nation. And number two, he feels that interest rates may very well go up a full percentage point for home buyers in the months to come.

And sad to say, higher interest rates may not be the only problem we are facing down the road. Reports are coming in that federal money has practically depleted itself with regards to the Rural Housing lending program and several of the good rebate programs that were designed to lure procrastinating home owners to quickly move forward with their purchases, refinancing and home improvements.

Thus it may be in the best interest for consumers to re-evaluate their decisions on holding off to purchase that new home or perhaps pay the consequences of losing not only the home buyer's tax credit but also having to pay a significantly higher interest rate at closing.
About Author Floyd J. Tapia :

If you are looking to find the best mortgage or refinancing deal then go to <a href="http://www.StLouisRefinancingGroup.com" target="_blank">http://www.StLouisRefinancingGroup.com</a>. If you have additional questions, then contact your St Louis home loan experts at <a href="http://www.LibertyLendingConsultants.com" target="_blank">http://www.LibertyLendingConsultants.com</a> or call 877-334-0210 to discuss your available options.


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Article Added on Tuesday, May 4, 2010
LD
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