I'm waiting for 4% rates to come back...

Well, I got news for ya... it ain't gonna happen any time soon. In fact home mortgage interest rates will soon be on the rise. By spring time, experts expect rates to be above 6%. Those are still very good rates, historically speaking, yet not quite as favorable as rates are currently (in the 5's). Why is this... do you ask? Well, there are a number of factors involved. The main issue today is the federal reserve.

The Fed has been buying lots and lots of mortgage backed securities lately to help pull this economy and housing market out of the gutter. Well... it's been working! The down side to that is there will be a point of diminishing returns. Eventually, the Fed has to stop buying all those mortgage backed securities. When that happens, and it will soon, mortgage rates will rise to the 6's at least. They are trying their best to make this a gradual rise, but if you or someone you know is waiting to buy until interest rates are down, wait no longer. You first time buyers, especially, have about three weeks to get a new home under contract. Call, text, email, fax the Beers Team with further questions about this or anything else involving real estate. We feel that educating our clients is our number one priority!

Oh By the way... I'm never too busy for any of your referrals!

Mortgage Interest for Homeowners

Ahhh, it's my favorite time of year, tax season. As I become more seasoned as a Realtor, I am coming to the realization that taxes are inevitable, and it's up to us to take advantage of every opportunity that we can. As a homeowner, I rely on deducting my mortgage interest each year. It takes a big chunk off of my tax burden, and it is one of the reasons I own a home today. For those of you who are self-employed, you can understand that we need all the deductions we can get! Self-employed or not, mortgage interest deduction is a big part of your tax return.



Some lawmakers are threatening to take away mortgage interest deduction. This talk must be stopped. It will affect us all adversely. Cutting out MID will most certainly lower property values that are already at lows that homeowners are struggling to cope with. Even if only the top level mortgages lose MID, it will most certainly have a trickle down affect on all housing markets. Each market segment is affected by all market segments and vice versa. In terms of property values, at a minimum, homes would lose in value what is equal to the present value of the tax burden being taken away. That value is currently estimated at $90-130 Billion! Losing that much in consumer dollars would be catastrophic to an already fragile economy. I will keep you all in the loop with further developments, but let's fight to keep mortgage interest deduction.



Oh By the way... I'm never too busy for any of your referrals!

Buy First or Sell First?

This is a great topic for the current market conditions. The answer, of course, depends on the situation in which each homeowner is involved. Most markets are seeing high inventory and not enough buyers to lower those levels. So what do you do? Some sellers choose to carry a bridge loan. This will help them to buy before they sell. A bridge loan helps borrowers by halting payment on their new home until their old home sells.

While this is an option, the old home may not sell. Some research shows less than 50% of homes listed do NOT sell. In a buyer's market such as the one we are in, It is wise to sell before you buy. In a seller's market, it may be a smarter choice to find your new home before you sell because the amount of buyers outweigh the number of homes on the market. This fosters competition and quick turnaround for listings.

I would advise my clients in our current market to do a few things before they decide to make any decisions. Sellers should find out what they owe on their current house. They should get prequalified for a home loan to see how much they can afford for a new home. They could also find out if they qualify for a bridge loan. Their lender should give them a good faith estimate of settlement costs. This will show them what their payments and settlement costs will be for their new home purchase. Sellers will also incur some closing costs on the sale of their current home. When we perform a market analysis, we always provide our prospective sellers an estimated costs to sell sheet. This will give them a pretty good idea what they can expect to net from the sale of their home.

Oh By the way... I'm never too busy for any of your referrals!