With FHA and HUD and economists announcing their predictions of higher interest rates (sooner than later) and recent history indicating interest rates can’tget much lower, NOW seems like the perfect time to Buy and Sell home. And that may be especially true if you’re a First-time Home Buyer.
3 Reasons to Refinance or Buy a Los Angeles Home Now
December 6, 2012 By 2 Comments
Present Homeowners can also position themselves for a brighter financial future with a Refinance of their present mortgage and securing a mortgage term reduction or lower interest rate. Gary Ryan Blair, a well-known motivational speaker, was once quoted as saying, “Opportunities are easily lost while waiting for perfect conditions“. I agree, but I think NOW is as near to “perfect” as it gets in the real estate market. Why?
Reason #1: For Buying & Selling … In our local market in Chicagoland, Homeowners are starting to recognize that the opportunity to successfully list their home is currently stronger than it has been in the last 5 years.
Pricing is key … as homes priced intelligently and correctly are selling. Buyers are paying attention too and beginning to move more quickly when placing their offers. And multiple offers are re-appearing inthe marketplace once again.
Should a Seller hoping to move on and buy once again, net proceeds from a Closing (or be capable of covering shortfalls within their sale)? According to real estate guru Barbara Corcoran’s recent comment on the TV Show “Fast Money”, the timing to do so is right. She says:
“Right now, if you are upgrading to a bigger house, even if you’re selling at 10% off, you buy your new house at 10% off. Price appreciation is going to go much higher than people anticipate.”
Move-up Home Buyers can currently qualify for their new home purchase at interest rates of under 4% … and buy that home at market values not seen for 10 years (or more) in some markets. For some, that has meant a net gain of thousands of dollars in gained equity and interest payment savings. To me, that represents thousands of reasons to consider this action.
Reason #2: First-time Homebuyers … with credit scores of 620 or greater and 5% down can qualify forCONVENTIONAL mortgages today. And benefit fromInterest Rates in the 3 percents! As someone thatstarted in the mortgage industry over 35 years ago when the interest rates were in the mid-to-low 6percents … I find this remarkable. And enviable.
FHA Financing is nowavailable for Home Buyers with 640 credit scores or higher (even lower in some cases) … and they can qualify for interest rates in the mid-3 percent range. This allows them to save tens of thousands of dollars in interest payments over the life of their loan … if they act NOW.
No doubt about it though. Credit Scores predict and control the savings realized … or the inability to save. Even interest rates at 6% (once considered a great rate) can be costing a Home Owner hundreds of dollars in savings each month. Consider thatstatement long term. Just based on the interest rates and mortgage pricings mentioned above, the loss in savings could be projected at:
$226 in Savings lost each month
$2712+ in Savings lost each year
$81,000 lost over the life of the loan
The impending increase in Mortgage Insurance rates on FHA-Insured Loans coming in 2013 once again makes timing of the essence. NOW (versus later) is looking pretty darn good.
Reason #3: Refinancing … If you presently have a mortgage, how does knocking 5, 10, or 15 years off your mortgage term sound? Or how about lower monthly mortgage payments? Those savings mentioned above (or something similar) could be yours. Again, the savings you achieve are based upon your personal financial scenario and credit scores. But doesn’t it sound worth investigating?
These savings are not speculative. They AREattainable. With sound counseling and the rightguidance they can be yours. You already know for afact what the results and costs for NOT taking action will be.