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An American home loan lender has unveiled 3.99 per cent fixed mortgages for 30 years, one of the lowest available in the US real estate market.
The Toll Brothers deal will apply to conforming loans which are $417,000 or less for no points, and a down payment of 20 per cent will be required.
The company, involved in real estate projects in 21 states, announced the deal as interest rates on mortgage deals across America hit record lows.
Last month a regular real estate survey by lender Freddie Mac showed the typical 30-year fixed rate American mortgage had dropped to an average of 5.17.
Don Salmon is chief executive of Toll Brothers mortgage subsidiary TBI Mortgage Co. Quoted by the Wall Street Journal, he said:
“We think we’re going to create some excitement in the marketplace.”
In a Dow Jones report, Richard E. Peek Jr, of the Florida Association of Mortgage Brokers, described the deal as “spectacular”.
Although rates remain at record lows, the American real estate market has so far been slow to pick up as many buyers still find it difficult to get credit.
Rising unemployment is also thought to be holding back a real estate recovery, with many buyers delaying in the face of reduced job security.
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This looks like good news for Americans and a good sign that things can improve, its very forward thinking to over a fixed rate ofor such a long period of time, it certainly gives home buyers the security of knowing what their monthly payments are going to be for the UK will follow suit with similiar products.