Housing mortgage bailout? How will it effect responsible home owners?

Are the interest rates going to go up or down? Is this a good time to try and refinance for a better rate? We have owned our home for about 8 years and never been late on a payment. We are responsible home owners. Will this whole thing make the value of our house decline?Housing mortgage bailout? How will it effect responsible home owners?
hopefully a more stable economy.





I gotta figure there will be more people chasing after less money; thus classic supply and demand will probably raise rates for anyone not sponging off the government here.Housing mortgage bailout? How will it effect responsible home owners?
It should avert mass foreclosures which have sunk all real estate values and made so many of our national banks nearly insolvent.





Mark Haines, who I like a lot, said on CNBC that this would teach a generation of borrowers that its okay to over borrow because the federal government will bail them out if things get bad enough, Then he said something about letting capitalism work. But capitalism hasn't been working normally since Greenspan depressed interest rates in the wake of the dot com bubble.





To use a baseball analogy, it was steroids in the form of cheap money and easy credit that juiced the American economy over a 6-7 year period. Now the steroid era is over, and the economy has collapsed. It has to be rebuilt without steroids, and that is a slow and painful and uncertain process. It's easy to suggest that everybody who can't pay their mortgage for whatever reason should lose their home, but that means that those people will have to be supported by state and federal governments with housing assistance, maybe health insurance and food stamps and with other types of relief.





One way or the other federal intervention is needed and necessary, and if it comes in the form of helping people stay in their homes by restructuring their mortgage debt, I would say that this is an appropriate response with the potential for multiple benefits for the American economy if the real estate markets are stabilized.





If you can refinance now to a low 30 year fixed rate, why wouldn't you? You'll have a lower debt service that will enable you to save more, invest more, reduce more debt, or consume more.





Good luck.
1. if you have the credit scores and the equity, than now is a great time to refinance.





2. the mortgage bailout will hopefully keep more people in their homes. less foreclosures means that home prices might begin to stablize. this is the result of simple ';supply and demand'; economics.
Becareful about refi. Read the fee schedule and read every detail. Banks are really ramping up on fee's.. I have heard stories of people doing refi's now and paying a $1500 dollar application fee and then getting denied even though they have stellar credit. Banks are going after peoples wallets
鈾?I think if you can get a better interest rate, then take advantage of that and do it. I think the value of your home will decline some, but will go back up in a couple years.
in order:


the short term rates are artificially being lowered to spur corporate borrowing, as well as restart the ailing housing markets. these rates will begin to creep up as banks are no longer able to show a profit, and must entice both borrowing and also depositing of funds (our savings is what they lend to others, taking a cut and giving us part of the interest earned).


If you have good credit,





are confident that you are safe in your job for the foreseeable future,





intend to keep the home at least 7 years (the time it typically takes to see savings equal to the cost of re-financing),


or


can shorten the term of repayment (keep same payment but pay off in a few less years due to lower rate)





then re-fi may be a good thing to consider





Finally, yes, the re-adjusting of home values could lower your home's value, if you live in an area where there are:


too many homes for the demand





too few qualified buyers for the size/cost of your type of home





too high cost of construction to be affordable (housing starts are dropping as a result of developers not being able to turn over the homes already built for a profit)





Seriously inflated prices for premium homes or as a result of too few homes for the type of buyer in your price range (supply limited by the above condition can result in your home being over-valued for an economic cycle, but that cycle has ended, and you may be stuck with a house that cost more than what it is really worth on the market). What is even worse is if you owe more than you can realize on a property, which is why so many folks are opting to let their homes revert to the lender, to get out of a negative equity position.





these ';bad borrowers'; are the reason for this present crisis,


not that the borrowers intended to default, they just are cutting their losses and passing them on to other consumers


not every personal bankruptcy is because a person is morally bankrupt as well (they just aren't as prudent perhaps as other purchasers).





Hopefully you will weather this, and if you don't intend to sell in the near future, your home value will eventually increase again, just like 401Ks and IRAs will rebound, but it's tough to think in the short term about the losses suffered...





at least if your assets diminished you will get a reduced tax burden this year....