Another major financial domino fell today with the Lehman Brothers bankruptcy. Also took the markets down big time, as I'm sure you know. Investors (and investment banks, and foreign governments, etc) have money to park, and right now they are parking it in bonds, which pull down interest rates. In fact, 30-year mortgage rates have fallen by almost 30 basis points again today - which is a huge move, on top of last week's 50 basis point drop.
Money is getting very cheap, which is great if you are buying a home.
I'm sure the phones will be ringing off the hook tomorrow at my lender's office... refi-mania is back in style, and this turn of events should only help the housing market.
But let me caution you right now - most lenders have laid off staff and many have gone out of business altogether. There are a lot fewer players in the game, and suddenly there is tons of business on the table.
That means (potentially) poor service and frustrating delays.
If you are under contract, currently listed or thinking of buying, make sure your contract dates are stretched to reflect a major traffic jam with your financing. And don't even think about using a lender you don't know and trust.
Just a word to the wise...
