The Fed’s purchase of these bonds over the last few years has driven mortgage rates to historic lows. The assumption that there would be a reduction in bond purchases has caused 30 year mortgage rates to spike upward over the last few months.
"The Fed could have caused rates to shoot up this week if it had announced the tapering of its bond-purchasing program. For now, borrowers have dodged another spike in rates. The Fed's announcement might even cause rates to drop in coming days, says Paul Edelstein, director of financial economics at IHS Global Insight.
‘Mortgage rates should fall back -- not massively, but to some extent,’ he says.
That doesn't mean homebuyers and homeowners should wait for lower rates, mortgage professionals say.
Eventually, once the Fed lets the mortgage market and the economy start walking on their own, rates will probably head back to the 5 percent or 6 percent range, says Scott Schang, manager for Broadview Mortgage Katella in Orange, Calif." (Bankrate.com)
Federal Reserve policy makers decided this week that the economy isn't in the right place for them to start winding down their bond-buying program. By the time they meet in December, it might be.
Don't wait until the Fed's make the announcement that they will wind down their bond-buying program, by then it will be too late!!
Another Great Reason to Sell now, especially if you are upside down in your mortgage!
On January 1, 2013, Congress passed an extension of the Mortgage Debt Relief Act.
This was set to expire on December 31, 2012, however their extension could be very helpful to you.
The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. It's a good opportunity to walk away from a home you can no longer afford. There are many reasons for this. If you want to know if you qualify just contact your local realtor for more information.
