Thursday, September 18, 2008

Mortgage rates drop sharply after bailout plan Brokers see fresh wave of interest as 30-year rate falls below 6 percent

by Jane Hodges

For the first time in nearly eight months, mortgage brokers and lenders have good news for their clients. That’s because the federal bailout of mortgage giants Fannie Mae and Freddie Mac has resulted in a sharp and sudden drop in mortgage rates.

Sunday's announcement that the government would intervene in the troubled lending giants sent long-term mortgage rates plunging.

The average rate on a 30-year, fixed-rate mortgage has fallen to 5.88 percent, down from 6.26 percent last week, according to Bankrate. The average rate on a 15-year loan fell to 5.49 percent, down from 5.77 percent during the week prior. For the mortgage market, that represents a huge drop, virtually overnight.

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