Hagerty Homes

Click here to watch a Podcast from the President of the National Association of REALTORS, as he explains how the economic stimulus package will give the housing market a big boost.

This was the largest rate cut by the Fed since the early 1980s. The Federal Open Market Committee stated, ”The committee took this action in view of a weakening economic outlook and increasing downside risks to growth.”

Over time, rate cuts should stimulate economic growth by making it cheaper to borrow money for consumption or investment. Banks typically lower their prime lending rate for their best customers in lockstep with the Fed. Many consumer and business loans, however, are based on interest rates set in competitive markets, which may or may not follow the Fed’s lead.

The Fed has now lowered interest rates by 1.75 percentage points since Sept. 18. Click here to read the full story.

In response to the “Good Credit? Good Luck” article from the August 26, 2007 Post & Courier, there are still a number of reputable mortgage bankers that buyers can contact.  Prudential Carolina Real Estate has partnered with Guaranty Bank, (FSB- Milwaukee, WI) doing business locally in the Charleston area as Home Mortgage Choices. They have been Prudential Carolina Real Estate’s lending partner for over 13 years.   

This credit crunch that has resulted in cancelled closings, overnight bankruptcies and underwriting changes across the board has significantly increased Guaranty Bank’s business for August.  There are numerous mortgage products available and, if you work with a knowledgeable loan officer with the stability of a bank behind them, you’ll be fine. Guaranty Bank maintains a 100% on-time, funded closure rate and has no intentions of blemishing that record now.

Buyers, don’t be frightened. As any realtor will tell you, before you go out looking for a new home, visit a mortgage lender. Get fully approved, lock into a product (to avoid it becoming unavailable later) and set realistic expectations up front for everyone. Guaranty Bank continues to offer 100% financing, VA, FHA, State Housing, Jumbo (loan amounts greater than $417,000) and stated income loans. Granted, last year’s buyer with a 580 credit score, 1-day out of a bankruptcy, open collections and the inability to verify income is out of luck.

Guaranty Bank has an excellent management group, a smart, quick product development team and years of experience navigating through change.  They manage cautiously and, in the coming months, will remain competitive and continue to close and fund new loans.

Buyers, please make sure your loan officer is (a) Local – do not go online and try to avoid using an out-of-state lender, (b) Backed by a bank – banks maintain 100% control of your transaction. I suggest staying away from mortgage brokers in today’s market. Each loan that was saved this month by Jason Watkins, the lender in my office, was a loan from a broker and (c) Make certain you use someone you trust. If you don’t have someone you trust, call Jason Watkins with Guaranty Bank at 843-697-8050. He’ll work hard to earn it.

The market is changing and no one can tell you with certainty what the outcome will be, but don’t let the negative media stop you.  Talk to your loan officer and find out if buying a home is right for you. 

The American dream of owning a home is not lost, only the fantasy of owning the one you can’t afford.

As you may have heard, the Federal Open Market Committee (FOMC) lowered the discount rate by .50% today(from 6.25% to 5.75%). The Federal Reserve Board said it was acting to “promote the restoration of orderly conditions in financial markets.” While this will have little or no impact on consumer and commercial interest rates and credit, what it does is allow for financing institutions to borrower money at a lower rate of interest enabling investors like Countrywide to borrower funds cheaper and keep operations alive. This is a temporary, short-term solution.

Countrywide had to borrow $11.5 billion early this week and economists believe that may be enough to avoid a Chapter 11 Bankruptcy.

The Federal Funds rate (known to us as PRIME) remains at 8.25% (5.25% for financial institutions - 8.25% for consumers) but look for it to decrease to 8.00% on Sept 18th.

A cut to the Fed Funds rates will have a positive impact on the rate at which consumers and commercial lenders borrower money.

If you have a home equity line of credit tied to prime, your rate would decrease by .25% lowering your monthly payment.

Since the housing and credit bubble began to unwind, dozens of lenders have gone out of business, several hedge funds have failed and thousands of homes have gone into foreclosure.

The Fed’s move is a positive note and implies that the Fed realizes a need to intervene. To date, they have poured billions into the market attempting to avoid a market “stall” and now cutting the discount rate by .50%.