Mortgage rates as low as 4% ???

Yesterday I heard that mortgages rates were going to go to 4% based on a new government program. Like a lot of information these days, the truth doesn't always live up to the hype. A local lender sent me this today:

"We interrupt this broadcast to let you know everyone in the US is now eligible for a new mortgage rate at 4.5%" But wait, there's more..."Act now and we'll return your 401k to the highest level it has ever been."

I hate to say it, but you may have already heard something to this effect...if not. Pay attention, you will. The news media has been blasting this story on the front pages of every paper including the Wall Street Journal.

FACT: The US Treasury Department has NOT signed any new "acts" or "stimulus packages" that will make banks and mortgage companies issue loans at 4.5%. Treasury Secretary Paulson, admits that there was merely a "proposal" mentioned and the idea is being tossed around...but there is still much discussion needed before a plan like this would be put into place.

Paulson also said that "IF" such a plan were to pass, the 4.5% rate would ONLY be for home-owners buying new homes...NOT for those refinancing. As with Bush's Economic Stimulus Package that was passed this February, there would certainly be strings attached as well.

Remember, in this credit market, interest rates for mortgages are tied to a person's credit score, the amount of equity in their home and the amount borrowed. As much as I would LOVE to see EVERYONE get a flat rate of 4.5%...I honestly would be shocked, happily, but shocked if this plan ever became reality.

BOTTOMLINE: If you were planning on buying a home and thought today's rates (in the mid 5% range) was good...DON'T PASS IT UP. If you were thinking about refinancing...let's do the math together. If it saves you enough money, DO NOT wait another day. You may not get another chance like this for a long time.