Real Estate Update
Mortgage rates continue to dive with the average 30 year fixed-rate mortgage at 5.14 percent last week, a new record low. Last year this time, the rate hovered at 6.17 percent for a comparable loan. The result: an inundation of mortgage applications, the highest in five years.
Fannie Mae mortgage holders no longer have to fall behind in their payments to qualify for a loan modification. Borrowers facing financial difficulty due to losing a source of income (other hardships do qualify) can now apply for an “early workout” loan alteration. Under Fannie Mae’s program, borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If the reduced payments are made on time each month during the trial period, the modified mortgage terms may then become permanent.
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