Since the government has stepped in to ease the burden of consumer debt, mortgage rates are finally starting to ease up a bit. With $800 million in a government plan, the government plans to use about $600 billion of that to purchase mortgage debts incurred b Freddie Mac and Fannie Mae, and the Federal Home Loan Banks within the next several months.
Because of this assistance, many mortgage lenders feel better about lowering rates. It may not be happening as fast as consumers would hope but it is the beginning.
So when is the right time to take advantage of the dropping rates?
If you have a strong credit history and a solid track record of paying your debts, you may want to make a move while the going is good. Those with low or no credit will probably not be able to make a jump, as lenders will likely continue to shy away from risky loans. But those who are capable of proving their credit-worthiness, might want to consider now as a good time to get a mort gage or consider refinancing. There are no guarantees that rates will continue to drop. At this point, they can go in either direction as the government works through and moves forward with their plan for rescue.
If you are credit-worthy and looking for a new home, it might be wise to take time now and apply for the mortgage you want before other buyer confidence comes back full-throttle, which will push home prices higher. Right now, low mortgage rates and even lower home prices could make a lot of difference to your personal finances.
Even though the government's involvement in the housing crisis is helping the mortgage industry, it will make no difference in the general topic of credit availability. Those will credit scores of 720 or more stand the best chance of getting loans and credit. Consumers will decent credit might see more opportunity to get an affordable loan but, like those with bad credit, they may also find it difficult to get a loan or a mortgage , without first rebuilding their credit history.
There is no re ason to feel that all hope is lost no matter what your credit standing is currently. You can work hard on improving your credit so you are ready when the rates are good. Keep paying your bills on time, make more than the minimum payment on your credit cards, and work as hard as you can to pay off your debts in full and clear up your credit. Request copies of your credit report from all 3 credit bureaus and analyze the information contained on each, as none of the 3 will contain the same information. Check for incorrect information and file any disputes you find with each agency. The more diligent you are about correcting your credit, the more opportunity you will find for easing back into the economic stability.
Tisha Kulak Tolar is a writer for DebtFreeDestiny.com where she regularly writes about debt consolidation, debt settlement and saving money.
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