Would Lower Market Rates Pump Up Sales? — New York Real Estate

Would Lower Market Rates Pump Up Sales?

by John Tayeb on September 30, 2010

zero rate financing

Will mortgage rates ever drop to zero percent?

Zero percent financing has long been a loss leader in the automotive industry, but Keith Gumbinger, vice president of HSH Associates, a provider of mortgage information, says that scenario is unlikely. You’d have to find an investor who would buy a security with a zero return – a hard sell even today.

Jim Sahnger, mortgage associate Palm Beach Financial Network, concurs that the funding would be hard to find “unless there were significant fees on the front end to compensate for costs to originate, deliver, default, etc.”

If zero percent financing could be funded, Sahnger believes potential borrowers would be lined up, kicking up demand for houses.

Gumbinger isn’t so sure because buying a home is a bet on the economy and that kind of confidence is hard to find, he says. “People are concerned that tomorrow is not going to be better than today.”

Source: MarketWatch.com, Amy Hoak (09/27/2010)

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s