We are the Champions

To be perfectly clear, Freddie Mercury and Freddie Mac are not the same.  Freddie Mercury was born in 1946 in what is now Kenya, grew to maturity in India, and became the flamboyant front man of a British band; Freddie Mac was born in the minds of U.S. Congressmen in 1970 and has lived an equally-storied life just outside of Washington D.C..  Freddie Mercury died of Aids in 1991; Freddie Mac is still (much to the chagrin of many current U.S. Congressmen) alive and well.  Freddie Mac’s mission is to stabilize the mortgage markets and expand opportunities for affordable housing in the United States; Freddie Mercury’s mission was a little more simple than that: “We will, we will, rock you”.

Although the Fed hiked short-term interest rates on Wednesday, putting other bonds “Under Pressure” (my favorite Queen song) to increase, longer-term interest rates are driven by the over all rate of inflation and the broader economic outlook in general.  So not all loans jumped 1/4% this week; mortgage rates took the news quite well and have actually improves slightly over the last three days.  Freddie Mac forecasts a modest increase to mortgage rates for 2016, but says that they will be at “historic lows” through the next 12 months.  I agree with Freddie and say to homeowners across the state: “We are the Champions”.

Less Red Tape

Freddie Mac has started allowing a one year income waiver again, meaning that certain well qualified borrowers can get away with only showing the previous year’s tax returns instead of needing the two year average.  There is more to it than just that, but the fact that guidelines are loosening up a little is cause for celebration.  Go buy yourself a new house.