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!

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!

Big Surge in Mortgage Applications!

The first week of 2009 proved to be a busy one for mortgage lenders. Rates for a 30 year fixed rate mortgage are hovering and even dipping below 5% for some applicants. This is a major cause for the mortgage applicant index to be higher than it's been since July 2003. Now that the federal government is committed to buying mortgage-backed securities to keep borrowing costs low, many experts predict that rates will stay low for the next quarter. Note to all first time buyers out there, NOW'S THE TIME to buy. House values have yet to be effected by the rally of mortgage applications.

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