FED ANNOUNCES they will buy Mortgage Backed Securities
The FED came out today with a few big announcements.
1) First, they have lowered the FED FUNDS Target rate to 0.00 - 0.25%. This is what many rates, like PRIME, is technically tied to. This is good news for credit cards, home equity loans, etc.
2) The Fed has indicated that they WILL buy Mortgage Backed Securities in an attempt SETTLE down the market. At this time, there are no details. There is no plan, no indications whatsoever who will benefit, no direction as to who may qualify, under what terms and guidelines, and is it just purchase transaction, or refinances too.
3) They indicated they will try to keep rates low for a long long time!
Many people will now be tempted to "hold out" for the "bottom" of the market. THAT IS A BAD MOVE. The key strategy is getting somewhere near the bottom with the right rate and cost combination that works, not hunting and holding out for the exact bottom. No one knows when or where the bottom will be until 6 months after it is gone.
Bottom line: If it makes sense for you to take advantage of TODAY'S real historic rates, DO NOT HESITATE to act NOW.