Mortgage brokers see sudden surge of buyers

December 5, 2008 7:33:39 PM PST
Just the prospect of government-backed, low interest loans for homebuyers has created a significant stir in the Bay Area real estate market. That's according to realtors and mortgage brokers delighted with the sudden surge of buyers -- people who until now couldn't qualify.

Business is up 100 percent this week at San Eamon's BWC Mortgage, just days after the Federal Reserve revealed a plan to offer low interest fixed-rate mortgages to home buyers.

"The market's already reacted and interest rates have come down significantly in the last week and a half. We've already seen our rates come down to the low 5's and in some cases, the high 4's," Simonich, the CEO of BCW Mortgage.

The fed proposal would subsidize rates so homebuyers pay 4.5 percent for a 30-year fixed-rate mortgage. The current rate for most buyers is about a percentage point higher. Simonich says some clients have asked whether they should move now or wait until the fed actually makes its plan a reality.

"It wouldn't benefit people to wait. If they get into the process right now, by the time something materialized for them, they could benefit from what could be a very nice interest rate," said Simonich.

"People are going ahead, they're excited. If it's a little lower today, or a little lower tomorrow, it really won't make a significant impact on their decision. It's more the availability of affordable housing," said Pat Huffman, president-elect of the Bay East Association of Realtors.

So now, at least some prospective buyers are jumping off the fence and into the market, more confident than they have been in a long time that they'll qualify for the home that they want.

Castro Valley school teacher Noel Rapozo is one of those buyers. She's been waiting and watching the market for two years.

"I am able to afford a home, which is great now. And I will be buying very soon, hopefully," said Rapozo.

The federally backed low interest loans won't help everybody. Those with bad credit, low income or no down payment still wouldn't be able to qualify.


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