4.75% mortgages???

Lots of news lately in terms of mortgage rates. Many of you have been calling asking me what the real deal is....so here is what we understand now. Remember, things are changing nearly every day, so some of these details may change slightly or even be eliminated with completely different things being added.

The low rate would only be available to those purchasing a home, not for refinancing.

Loan limits will be the maximum amount for conforming loans, $417,000 in Texas.

The government hopes that this plan will increase the demand for homes and stabilize housing prices, both key components for improving the current economic situation.

Home buyers who have not owned a home in the last 3 years may also be eligible for a $3,750 tax credit ($7,500 for a couple) if they purchase a home before July 31, 2009.

Although it is aimed at purchasers, the increased demand for mortgage-backed securities may cause mortgage rates in general to drop. That, in turn, would enable many homeowners to refinance into lower rate loans.

With 30-year fixed rates for loans of $417,000 or less dropping significantly this week, refinancing may make sense for homeowners with rates of 6.25% or higher. We will be glad to run a quick analysis of potential savings.

Remember there is a compelling reason to get a property under contract before the end of 2008 - and that is FHA required down payment (not a gift, no special programs, you must have this amount of cash available) will change from 3% to 3.5% on January 1, 2009. This is a difference of about $1000 out of pocket on a $200,000 home.

Friends, remember that I always have time to assist the friends, family and coworkers that you like, when it comes to buying and selling real estate. The next time you're talking to someone that can use my help, give me a call.