August 7th, 2007 4:19 PM by
The Federal Open Market Committee (FOMC) met today and decided that the Federal Funds interest rate was fine right where it was and left rates unchanged at 5.25%. They mentioned that inflation rate has moderated recently and acknowledged the markets concern about a credit crunch. The voting was unanimous to leave rates unchanged. Here is the FOMC policy statement from today.
On the lending side of things, some lenders have discontinued offering 80/20 and 75/25 programs to even the best borrowers. My top two lenders now will only lend to a maximum of 95% of a homes value. The 80/20 product is still offered at many other lenders that LaPorte Group, Inc uses, mainly banks that do not sell the loans to outside investors. The two top lenders we currently use have the best interest rates available, whereas the bank interest rates can be .125% to .25% higher on a 30 year fixed rate mortgage. On a $200,000 home the payment difference on .125% is only $13 per month, but over 30 years adds up to $4,680.
Here's more info about the mortgage meltdown: Big Ticket Mortgage Rates Rise from CNNMoney.com