The Bailout Of Spain And The Drop In 30 Year Mortgage Rates Be.e A Golden Opportunity For New

Real-Estate Mortgage rates, already at historically lows, dropped even further this week, as grim news regarding Spain’s economic turmoil surfaced. Spain will be approaching other countries for a bailout package, a package that is estimated to cost $125 billion. This is a dramatic turnaround from the previous week, in which Prime Minister Mariano Rajoy had announced that Spain would not need any type of financial assistance. Yet, the overall toxicity of the subprime real estate loans that its banks had invested in simply was too overwhelming for the nation to handle. The country requested that a fund be created specifically for the recapitalization of Spanish banks. This would be Europe’s fourth bailout since the debt crisis emerged in 2008, as Greece, Ireland and Portugal had received financial assistance. Repercussions in global markets were felt immediately. The Dow Jones dropped over 200 points following the announcement. The rating agency Fitch downgraded Spanish bonds to two levels above junk, while Moody’s warned that a downgrade was likely. The US thirty year fixed mortgage, already under pressure from dismal economic indicators announced recently, plummeted to 3.67% from the previous week’s rate of 3.75. The news regarding Spain’s bailout request came on the heels of a weaker-than-expected jobs report ten days earlier. After the economy added more than 200,000 jobs for three months in a row, the latest employment data showed a tepid increase of 69000 jobs created while unemployment increased to 8.2%. "The jobs report was a big surprise," said John Walsh, president of Total Mortgage Services in Milford, Conn. For those looking to refinance or shop for a mortgage for a new home, the timing could not be better. The thirty year fixed is now at a rate not seen since the early 1950’s. Yet, trying to time the favorable rate structure is difficult. It could also shoot up at any time. But rising fuel and energy costs could lead to inflationary pressure, which would eventually mean higher mortgage rates. Also, Mr. Walsh says the next job report will help set the tone for what happens next with rates, as investors get the sense whether economic growth has lost steam. If the report is positive, rates will likely rise again, he says. James M. Di Piazza Bond Street Mortgage LLC .bondstreetmortgage.. About the Author: 相关的主题文章: