Mortgage rates - the lowest in decades

Mortgage rates on residential and commercial loans are at their lowest in 60 years. Home equity lines of credit, loans for home improvement, debt consolidation, home renovation, and house construction are readily available.

Refinancing options include online applications whether it’s for a home equity conversion loan, a credit line, a second mortgage, an adjustable or fixed rate home equity loan: cheap equity home financing is available.

First time home buyers and existing home owners who need home loan modification should take advantage of interest rates that are at multi-decades low.

The reason for this is because interest rates will not be this low for long. Projected mortgage rates call for them to start to increase as soon as the economy gains traction. The time to compare home equity rates and to take action is now for they will start heading back up very soon.

The current interest rate environment resulted from a near total meltdown of the US economy.

The severe recession of 2008 and 2009 resulted in lending institutions freezing credit. Mortgage rates or other home loan rates meant nothing because mortgages were impossible to get. .

The situation has since changed. There is now a small window where there is once in a lifetime opportunity to get loans at great rates.

Unfortunately, during those dreary days of the recession, it was not only those greedy marketeers on Wall Street and mortgage lenders and brokers who suffered, but Main Street suffered as well.

Businesses couldn’t even get short term loans to pay their employees and many had to lay off workers while others had to close their doors completely. As businesses faltered and unemployment increased so did foreclosures on residential and commercial properties.

Government’s intervention was necessary to prevent the total meltdown from a very sick economy.

One of the major contributing causes of the recession was the total collapse of the housing market.

This was especially bad in those states that had seen runaway real estate prices in the previous decade culminating in all sorts of shady behavior from investors, banks and other mortgage lenders as well.

Financing and refinancing of home loans and mortgages were done haphazardly as greed ruled at every level.

In those torrid real estate markets like Florida, California and Las Vegas, it was not uncommon for a person to purchase properly with no money down, see the value of the property inflate astronomically, sell and get out, thereby pocketing in some cases hundreds of thousands of dollars in only a few months.

Naturally, the temptation to repeat this activity was great and an increasing number of people engaged in it. Mortgage rates didn’t matter. Greed begot greed! Also, the mortgage brokers who made these mortgages and loans didn’t do any due diligence.

They offered No Documentation or No Doc Loans and Stated Income Loans where they accepted anything a customer told them. No checking was done. They didn’t have to!

After all, they were not even keeping these mortgages on their books, so they were not assuming any risks. Instead they were selling them to be packaged and sold as securities or equities on Wall Street as Mortgage Backed Securities, thus passing on the risks to someone else.

This moral hazard which seemed to insulate them from risks caused them to behave increasingly more recklessly. This made a lot of money for a time for many people at every spectrum of these transactions.

However, the day of reckoning was coming. The demand for these transactions drove prices skyward at an alarming rate which was impossible to sustain. The resulting crash almost destroyed the US economy. House prices plunged and Wall Street followed.

It took massive injections of capital into the economy to quell and put out the fire. Although a recovery is not yet in place, the downward spiral has been stemmed.

People are looking ahead again to a brighter future. It is also true that many danger signs still lurk, for instance unacceptably large deficits because of all the borrowing and runaway inflation because of all the liquidity pumped into the economy.

There is a narrow window though for many people to take advantage of the extremely low interest rates.

Mortgage brokers and lenders are getting aggressive again as interest rates are at 60 year lows but are not expected to remain low. Bankers like GMAC home loan, Ditech,and City Mortgage are again heavily soliciting business from jumbo loans on home mortgages, to home equity line of credit (HELOC).

News, quotes and comparison on home loan rates are ever popular again. However, this may be short lived for as soon as the economy recovers from its malaise, home mortgage rates whether its for a home equity mortgage rate, adjustable rate mortgage or any other home loan will start to rise.