• Mortgage rates in 2010 are expected to rise from 2009’s historically low levels. Early last year, the Federal Reserve announced plans to purchase debt and mortgage-backed securities from Fannie Mae and Freddie Mac to lower interest rates for consumers and spur home buying. As a result, rates on 30-year, fixed mortgages fell to historic lows. However, the Fed’s asset purchase program is scheduled to expire at the end of the first quarter of 2010, and a lack of private demand for mortgage-backed securities could lead to a rise in rates.
• The once popular “no down payment” loans which meant borrowers were not required to put down any money on a house to secure a mortgage, now are practically non-existent. Instead, most lenders require borrowers to put down at least 10 percent, if not more, to secure a loan. Down payments not only help protect the lender, they also are beneficial to buyers. For example, the higher the down payment, the lower the loan amount and the lower the monthly payment.
Source:California Association of Realtors
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