Tag Archives: Loan

Interest rates are at the lowest point since the 1940s. Jump off the fence and buy your dream home.

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The big news last week is the extraordinarily low mortgage interest rates. And this time, the rates really are historic, the lowest since the 1940s. Combined with lower housing stock prices, this really is the best time ever to end your career as a house hunting fence sitter.

According to the latest word from Freddie Mac, the Primary Mortgage Market Survey shows the traditional 30-year fixed-rate mortgage averaging 3.94%. A year ago the average interest rate was 4.27%. A 15-year fixed-rate mortgage came in at an average of 3.26%. Last year, the rate was 3.72%.

Some potential buyers are still waiting for that stupendous “deal,” but we see this level of interest rates just that deal. Combine that with an amazing selection of homes, and you have a remarkable opportunity to buy or refinance.

Before you begin your search, be prepared. Lending institutions have tightened there qualifications for a loan, but the money is there for organized buyers.

Check your credit rating first. Lenders look for a rating of 660 and above, but that can vary from lender to lender. The higher your credit score, the lower your interest rate.

Pay down any debt you have now, and pay your bills on time. Lenders want to see that you are a cautious and dependable spender with the ability to repay the loan. This lowers your debt-to-income ratio.

Don’t borrow any more money. Taking out another loan skews your credit score. You really don’t need that new car right now.

Stay in your present employment position. Job hopping will reduce you ability to get a loan.

Save. The higher your down payment, the better interest rate you’ll get.

With all of these preparations, get pre-qualified with a lender. As you begin your home search, pre-qualification shows you are serious and sellers will take your offer seriously.

Now you’re ready to take advantage of these incredibly low interest rates to buy your dream home!

Short Sales? Sometimes not very short. Buyers should enter the process with lots of patience and an agent trained in short sale negotiations.

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The term short sale has woven its way into the homebuyer lexicon during the past year. While not a foreclosure property, short sale homes have their own special financial issues that require a real estate agent who is trained in this type of sale.

What is a short sale? When a homeowner is in financial difficulty, can’t keep current on mortgage payments and may see a foreclosure in the near future, the owner and the lending institution decide to sell the home for less than owed on the mortgage.

Buyers are attracted to short sales hoping to score a property at rock bottom price. That could be a misconception, because short sales are much more complicated than price. While the seller and her agent may set the listing price, the lender has final say to approve the sale or not. Dealing with two entities to buy a home can be a long process suited for buyers with patience and an experienced agent. There’s nothing short about a short sale. Here are some tips when you decide on a short sale:

  • Price. Submitting a low-ball offer most likely won’t get you anywhere. Your agent will show you comparable prices in the neighborhood, which should set the tone for your offer. The lending institution has the final say in approving the sale price. If the lender feels your offer is way out of line, they may not even respond.
  • Repairs. Short sales are sold as is. The home may have any number of repairs to be done, so be in the fixer-upper state of mind. Whether you’ll be issued a credit is up to the lender. Another way of thinking is that you are buying a home below market value and that gives you the financial leeway to make repairs.
  • Financials. You and your agent can perform a search on the property to see if the owner has more loans than the mortgage. The more debt, like a line of credit, the more complicated the process becomes.
  • How long? Short sales take a long time. If you don’t have the patience for that, continue looking for properties with your agent that may be easier to purchase and offer what you want in a home.

Short sales can result in amazing properties and a commitment to a very special home. With a generous dose of patience and attention to detail, plus a trained short sale agent, you very well may purchase your dream home.

Home prices up, mortgages lower in metro region. Support preserving the mortgage interest tax deduction

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What a difference a week makes! Even with Congress finally dealing with the debt ceiling issue for the time being, and then Standard & Poors downgrading the U.S. credit rating to A++, bright spots are popping up in the St. Louis metro housing market.

First, St. Louis is ranked number four in Clear Capital’s analysis of the 15 best performing housing markets for the last two quarters. Through July 2011, our area increased 12.5 percent in home prices. Clear Capital analyses loan data for mortgage and bank lenders.

Mortgage rates are following the overall trend of the economy, which dipped again last week to even lower marks. Local rates ranged in the 4.375 percent for a 30-year fixed rate loan and 3.625 for a 15-year fixed rate loan. These rates are a bit lower than Bankrate.com’s national average on a 30-year fixed rate mortgage of 4.54 percent and 3.68 percent on a 15-year fixed rate. So even with all the doubts, now could be the best time for you to buy or sell.

As your real estate agents, our job is to help you navigate through the buying and selling process with the end result of a fair price for both and the best mortgage rate available. We also help preserve benefits for homeowners that have been in place for decades and support efforts to keep the mortgage interest tax deduction in place.

Our economic recovery is based on jobs and home ownership. Now is not the time to deter homeownership by reducing benefits that will even lengthen the time it takes to experience a robust economy once again.

You can help too. Contact your senators and representatives to express your support for this issue now.