The Federal Reserve finally made an unannounced move to lower the discount rate by 0.5% last Friday.  This discount rate is the  rate that the Federal Reserve charges to banks for short term loans.  This move should allow lenders to ease their mortgage program and underwriting tightening for Jumbo loans as well as sub prime. Alt-A and Conventional mortgages.

At BeechTree Mortgage, we are still experiencing many phone calls and emails for Florida home purchase financing.  Florida home buyers are learning that mortgage programs and their underwriting or qualifying guidelines have changed.  Especially when considering a sub prime or Jumbo sized mortgage loan approval.  Even conventional mortgages underwritten with FNMA have thinned out first time home buyers in qualifying.  Mainly, Florida home buyers will need to have better credit scores, qualifying incomes, and have saved money for reserves or down payments.

The Federal Reserve has finally recognized the severeness of the mortgage liquidity crisis and their discount rate improvement last week should allow home buyers to ultimate obtain their home finanicing.  Sourses say the Fed may lower again when the meet in September.   If they do, keep an eye on the conventional mortgage rates.

Stephen Thaggard

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