Mortgage Rates Expected to Decline

" I do a pretty big house and with the Fed by more treasuries. Mortgage rates may soon be heading even lower you can believe it is now the time. To get off offensive by a new house or refinance the one that you've got we're joined. By two stars in the field we've got very obedient CEO of the mortgage market guide. And Greg McBride -- CFA. And senior financial analyst for Bankrate dot com. Burial want to go to you first as you get short changed and that individual shot bicker back. It is extraordinary what the Fed is doing I'm concerned that we are heading towards higher inflation because putting out a trillion dollars in cash but it's very clever. The way that they are doing it explains."

" Yeah it is and yes that's -- on you about inflation by the way home prices typically go open inflationary times to over that time period but. Yet the feds being pretty clever this of people have been since the peoples okay. That's buying a lot of folks who don't really understand the mechanics of this -- money down the drain know now and then they're saying you know that means Richard -- outlook not necessarily this might be lowers the rates get to media tiny bit lower and here's why. Because when you have a borrower paying a mortgage and an investor who puts up the money for. It's not a direct connection there's in between bases there's a service or who collects the money this Fannie Freddie there's Wall Street to each player takes a piece which means -- 5% mortgage translates to let's -- a 4% coupon for the investor. Well to get to 4% rate you 3% -- there's no such thing. And Fannie and Freddie in their buying have not purchased any of that you know they're buying they're buying the forest afford to have the five the five and perhaps. Which means that some of those mortgage -- existing at 66 and a half percent. Which are the ones being refinanced so its markets the Fed gets their money back on some of those pretty quickly so it's kind of a smart thing to do keeps rates from going higher. And it's pushed them already but it doesn't necessarily mean based on this evidence that they're going to go down significantly further."

" Great for people who know they're going to be in trouble in the coming year because that got an arm resets -- some sort they know they're going to uptick to the upside is now the time. To renegotiate -- mortgage or to buy in new house -- you have a little bit a chunk of change here I'm looking at the Jumbo thirty year fixed is now six point 89%. Eight. 9%. At this is full of seven now."

" It -- and in terms of those jumbos are all over the board I mean what white guys quoting and a half he could find some -- five and three quarters to your really gun shop around. Now as far as timing it look if you especially if you're refinancing alone I think now's the time to jump on here's why home prices are still falling. You could win the battle but lose the war if you hold out waiting for rates to drop. Only to find out that your home prices falling further and you no longer qualify the good news this with the Fed. Buying this over the course of the rest of the year it's gonna keep on -- a lid on mortgage rates the rest of the year. That's what's needed to buy -- bring home buyers back in -- very."

" We if we may be right at the Fed gets its money back that'd be great but in fact -- all the money that everybody is spending including the treasury. I think that there's going to be some kind of inflation and as inflation goes up race until eventually will go up as well so if you're looking for the perfect act. House prices may get cheaper but I don't think interest rates are going to your question not much cheaper no because he said inflation kind of like that's that the ocean and interest rates like the -- the rise on topic interest rates will always be greater than the rate of inflation and it's very low right now. But as inflation rises that was going to lend money below the rate of inflation -- need to have a return above inflation. So inflation will rise well prices we've already -- start to come up. They will get heart specially the summer driving season people all want to get back online doesn't happen quickly it takes time -- might spike. Pressured little bit more we're not talking about a right now we could see its sixteen months from now and as the Fed starts unwind and inflation starts to spike up. You can see interest rates move back up -- the 66 and hips brain's pretty easily."

" It is -- do you think home prices. All we keep hitting new records."

" It you know a lot of that is really depends on market dynamics me look at what's going to be the driver foreclosures in 2009 if Huckabee were -- it's going to be job losses to areas where the economies are going to be hit the hardest. Our our most susceptible for the price declines also foreclosures that problem is not going to go way there are still a lot of foreclosures that lenders have not put on the market itself."

" Even though low mortgage rates when they went for I feel that's a good question I'm getting a lot of it is just the fact that you don't there's. There's not enough demand to soak up all that inventory and it's you know how prices get cheap enough prices man comes and I mean -- reading about houses in Detroit being fought for what 400 or even fifty dollars and and they flip them for -- for."

" We'll look at it this way from the standpoint of home prices in mortgage rates you may marry the two of those together. Look at the affordability that homebuyers have now they haven't seen it in years and in home prices are already back to 2003 levels were lower in some markets. Mortgage rates at record low so that type of affordability something that homebuyers Harry before what about the higher price foreclosures the Jumbo foreclosures are a lot of people who thought that they can afford a million dollar house who couldn't. When they come on market -- those are going to be some real bargain."

" They've already started to and and depends on where you there's -- many areas we started to see those come on. Unlike market a lot of Florida a lot of Southern California and Florida is littered with them so you -- you've already seen some great bargains out there you know. If you rip van winkle and you just woke up the I knew you could purchase a home imagine that she's a good they had a wake up three years ago has now got 35% up my home the lowest rates in history George Washington couldn't get a lower interest rates and you have right now. You could you have to go back 315 years in Europe to get a comparable rate OK so think about how great it is to wake up now. Have your home price purchase on sale be able to do where you have a great selection. Sellers are going to be nice to you. And give you pretty much whatever you want as long as you can put I have to down payment there well you don't have to put in if you credits that you with a 10% down payment and you do that because I think sense kinda like you'll be in the --"

" That's really do you agree with that. Yes hey I need some of that depends on market dynamics and aren't let her not getting tougher on the requirements of the things you have to present before they'll lend you money on the while they certainly half."

" Now we've we've gone away from this -- where anybody that does give some he'd never save a dime. To borrow more than they can never report to repay -- and overpriced house it's gone back to the traditional. Underwriting guidelines are very alluded to that you know you have to have good credit you have to have proof of income and yes he you have to bring some money to the table for now -- You know as -- mark."

" It's sometimes they'll do this in the in the B bottom more than you'll bottom. It really hard to get the exact bottom right but if you're gonna miss an innocent you're gonna miss it you want to miss it on the way down on the way -- people south the same it's on the same line note if you miss it on the way down if you're a little early. The psychology. Of what she can get from the seller and the deals that you get as much greater if you miss it on the way up which is what most people -- that we consider. The sell it starts at markets improving I'm not going to give -- this about it now you get anything you want fast and very craft guys so much there is right."