If there’s one bright spot in today’s housing market,
it’s interest rates. In an effort to stimulate lending,
the Federal Reserve has cut interest rates to historic
lows. This means that well-qualified individuals can
refinance or apply for mortgages at clearance sale
prices. Qualifying for these low rates – or any mortgage
at all – is tougher than it used to be a few years ago.
But if you have a good credit history, income, and
aren’t drowning in debt, now is a great time to shop
around for a loan.
With all the news of plummeting home values, your
initial instinct may be to stay as far away from the
housing market as possible until things settle down. But
remember, the best opportunities come during times of
uncertainty. Real estate is still a great long-term
investment, especially if you can lock in these low
interest rates. Eventually housing prices will start to
go up again, and so will interest rates, so if you’ve
been thinking about upgrading your home, now is the time
to do it.
How do you know if you should apply for a refinance
or a new mortgage?
• If your current interest rate is above 6%, you could
save a few hundred dollars a month on your mortgage
payment
• If you have been considering
an addition or a remodel to your existing home, consider
shopping for a new home instead. An extensive remodeling
project or home addition means living in a construction
zone for several weeks to months. With lower interest
rates, you may be able to afford a larger home without
significantly increasing your monthly payment.
• If you are a first-time homebuyer, there are
additional incentives available. Your mortgage banker
will provide you with the latest information about
first-time homebuyer programs, including that $8000 tax
credit you’ve heard about.
In order to qualify for these great rates, you do have
to fall into the prime lending category. Banks are
looking more closely at any credit blemishes, so be sure
to pull a copy of your credit report from all three of
the major credit agencies (TransUnion
http://www.transunion.com , Equifax
http://www.equifax.com/home/ and Experian
http://www.experian.com/ ) and examine it
closely for any inaccuracies.
Once you’ve locked in a low interest rate mortgage,
contact us to talk about the right home and community
for your family.
