Bernanke Says Inflation in Check

This week Bernanke testified that inflation is in check and the economy has enough steam to prevent a double dip recession.  That’s potentially is good news for mortgage rates.  As our Real Estate market moves along, ever so slowly, low rates are very important to any recovery.  We are lending money and usually know up front whether or not someone qualifies.  Sometimes appraisals are a problem but with all the foreclosures, short sales and bank sales, we are not shocked by low values.

Warning, keep an eye on Congress’s reinstatement of the flood insurance program.  As of this morning it has not been voted on.  Not only are new policies unavailable but renewals will not happen until this is in place.  This is a big problem for our “Beach” clients.  If their anniversary date of the purchase of their home is in May, the renewal is due and they cannot get it.  I strongly suggest you write all contracts during this period with some kind of phrase “subject to the availability of flood insurance if required”. 

We have just been informed the some MI companies are relaxing their guidelines a little, allowing borrowers to go to 95% with mortgage insurance.  Rates have also been reduced for higher credit scores.