The current super low mortgage rates have many people wondering whether or not now is the time to refinance. For 23 weeks rates have been under 5%, last week headlines touted that the average rate for a 30 year fixed rate mortgage was 4.19%, the lowest recorded since mortgage rates began being recorded. With such history how could now not be the time to refinance? Oddly enough, now might not be the right time for you.

Here are some things to keep in mind to determine whether refinancing is right for you:

• Do you have equity in your home? If you are underwater on your mortgage you will have a hard time refinancing.
• Costs of refinancing. How much is it going to cost to refinance and how many months will it take to recoup the cost? Will you be in your home that long?
• Taxes. Mortgage insurance is a write-off come tax time. Is lowering the interest in your best interest?

These are just a few points to think about when considering refinancing your real estate. If you have plenty of equity, good credit and overall financial stability this could be the best time. There are a lot of things to think about when refinancing, for example, if you have less than 20% equity you will have to have prime mortgage insurance (PMI) which will add to your monthly costs. Take time to evaluate your financial and real estate picture. The historically low rates are eye-catching and are great for buying a home but they may not be ideal for refinancing your home.

Mortgage rates have once again hit record lows in an effort to spur real estate sales nationwide. Poor reports on job creation and high unemployment figures are spurring the lowering of rates, meant to improve the housing sector of our economy.

The current average rate for a 30 year fixed rate mortgage is 4.44%, a year ago it was 5.29%. A 15 year fixed rate mortgage is averaging 3.92%, down from 4.68% a year ago. A five year adjustable rate mortgage is averaging 3.56%, down from 4.56% a year ago.

Low mortgage rates appear to be doing the job of increasing home sales. While real estate sales are in no way booming, they are improving. The National Association of Realtors (NAR) tracks 155 metro areas across the country and has seen improvements in real estate sales in more than 60% of these areas.

The historically low rates are creating an ideal borrowing climate for those who have a steady source of income, the money for a down payment and good credit. It is a prime buyers market when it comes to real estate. The low home values and low mortgage rates combine to make it more affordable to buy a new home than it has been in years.

The recession has had a few benefits for those looking for the next best deal, one of which is the short sale. Short sales are when home owners owe more than their homes are worth and sell them for less than is owed. For the seller a short sale is a way to avoid foreclosure. For a buyer a short sale can be a great investment opportunity. The downside of a short sale is that the procedure can be lengthy and frustrating at times. A short sale is dependent on the lender’s approval and the lender’s involvement typically slows the entire process down.

Here are a few basics that can help you through this interesting real estate procedure:

• Know what the home is worth. A Realtor can do a comparative market analysis (CMA) and let you know what the home is worth. While you will probably pay less than the home’s value, submitting an offer that is too low will most likely be rejected by the bank.
• Find a real estate professional that has experience with short sales. A certified distressed property expert (CDPE) for example, is a real estate professional that has undergone specific training related to the sale of distressed properties.
• Be prepared. Just like buying regular real estate, have your money ready. If you will be getting a loan, do your mortgage homework before you enter the short sale process.

Above all, patience is a necessity when completing a short sale. The process can be a long one and waiting it out, while tiring, is unavoidable if you want the purchase to succeed.

Click here to read an article about short sales from NPR.

Interest rates appear to be staying put until the US economy gets back on track and stays there. This past week Ben Bernanke, chairman of the Federal Reserve, announced his desire to keep interest rates low due to the fragility of the economy. Unemployment figures are continuing to rise. These increasing unemployment figures are interfering with recovery and affecting real estate and general sales figures across the Country.

Historically low interest rates and low home values combined with the extended and expanded First Time Home Buyer Tax Credit, have been instrumental in boosting real estate sales in the United States. These incentives are bringing buyers off of the sidelines and have created a true “buyer’s market”.

Real estate is typically a catalyst for for economic recovery and keeping mortgage rates low will be a significant help in keeping the sales coming.

Click here to see a recent article about Ben Bernanke and his commitment to keeping interest rates low.

Finding a mortgage before looking for real estate is a smart idea

The first step in purchasing real estate should be getting a mortgage.  Getting a mortgage, or rather getting approved for a mortgage, lets a buyer know what he can expect to afford when looking at property.  It is important for a potential buyer to know how to secure a mortgage.

There are any places to look for a mortgage these days.  There are banks, mortgage brokers, finance companies, credit unions and private lenders.  Often experienced Realtors have mortgage brokers or banks that they work with often and using a lender that has a good reputation is often a safe bet.

When looking for a mortgage have a good idea how much you can afford to pay each month.  Look into the past, present and future to determine this.  It is of the utmost importance not to bite off more than you can chew when it comes to your finances and the affordability of a home that you might buy.

When applying for a loan a person must provide documentation of income, expenses, and assets.  Have your financial statements and tax returns ready and the process will be much easier.

Having a mortgage ready to go before finding a property will make the entire process smoother.  Financing is harder to get these days and being prepared is a wise step in the home buying process.

For more information on mortgages click here.

Low mortgage rates are doing the job to make real estate more affordable

Keeping mortgage rates low is helping to stimulate real estate across the Country.  For the past few months the public and private sectors have been putting their heads together to get our Country out of the mess we are in and real estate and lending have been the primary focus.  The lowering of mortgage rates and keeping the interest rates low has been playing a major role in turning real estate around and getting potential home buyers off of the sidelines and into property.  Low mortgage rates are helping keep the cost of buying real estate low, enticing people to buy property.

Mortgage rates have been holding at historically low rates.  The current average rate for a 30 year fixed mortgage is 5.12%.  The average rate for a 15 year fixed mortgage is 4.69%.  A recent article at Realty Times points out “Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors.”

There is a drive to continue to keep mortgage rates low as the low rates appear to be doing the trick as the real estate sales volume continues to increase across the Nation.

For more information about mortgage rates visit Realty Times by clicking here.

***Beginning January 1st, 2009 the new FHA loan limit will be $271,050 and the new downpayment requirement will be 3.5% of the purchase price.

Conforming 30 yr. fixed – 5.125% (assuming credit score of 740…rates may be higher for lower credit scores – rates are quoted with 1% orig.)

Conforming 15 yr. fixed – 4.75%

FHA/VA 30 yr. fixed – 5.375%

As always if I may help you or your clients in any way please feel free to call on me at your convenience. I look forward to the opportunity!