A Global Market Slow Down Heads the Reason for the Big Stock Market Drop

Why Interest Rates are Down

Los Angeles, USA 10/06/2008 05:34 PM GMT (TransWorldNews)

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"Wachovia has just halted trading pending a news alert. Brazil and Russia halted trading on their exchanges today. Never before in history. What are people doing? Buying Bonds. When they do that guess what happens to interest rates? That’s right, they come down," says Fred Solomon, radio show host, author and co-founder of Solomon Financial.

"In many of our last year's (2007) radio show broadcasts, I told you this was going to happen. People were so afraid about inflation and the dollar dropping and I said no way. I just don’t see it with $1.4 trillion of loans adjusting," adds Solomon. Now, they are predicting $1.4 trillion to go into default by the end of 2008. There are 250,000 people per month in the U.S., receiving foreclosure notices. These numbers are growing not slowing down. They are going to drop the rates by a quarter of a point at the next Fed meeting.

This is a perfect storm for a very negative market. “A credit crisis and fear in the marketplace were the words I heard on CNBC," reports Solomon. Interest rates are down.

The thing that stinks is that because of the liquidity crisis rates are not as low as they should be. We are currently at 3.48 on the 10 year Treasury as of 9:10a PST. The all-time record low on the 10 year Treasury of 3.09 was on June 9th of 2003. Rates were 5.25% for a 30 year fixed at zero cost where we pay for title, escrow, appraisal, credit, all the costs that go into the cost of refinancing. Right now we are in the low to mid 6’s on a 30 year fixed up to $417,000.

If your loan is above $417,000, well the maximum loan amount is $729,750 until December 31st, 2008. Starting January 1st, 2009, this loan amount will be reduced to $625,500. So, give us a call if your loan amount is above $417,000 and lower than $729,750 asap. The rates are down again. If your loan is larger than $729,750, the best loan for you would be a 5 or 7 year fixed adjustable. Oh, by the way, those are the same loans that are causing people to go into foreclosure.

Many people I know, got into a 5 year adjustable and now cannot refinance because they don’t qualify with full documentation and their property value has dropped. If you are one of my personal clients, you know I told you to get into a 30 year fixed loan since the day I got into this business in 1990. In fact, we did such a good job of putting our clients in the correct loan program, that we almost put ourselves out of business because not too many people wanted to refinance into a higher rate.

So get a 30, 20, 15, or 30 year fixed interest only (where the rate will never change over 30 years but gives you the option to pay an interest only payment for the 1st 10 years). The payment will change after 10 years, but not the rate. We call it the Smart Loan and we have info on all these different loan programs on our website. Which one is the smartest for you?

Fred Solomon and Solomon Financial can help direct you and tell you what your best loan options are.

(888) 305-1408

solomon@sfmdirect.com
www.freemoneyhour.com

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