Where is the very bottom of the home market?
With interest rates at an all time low – still – the question is: Should I buy a home now? The five considerations here should help:
Q: Why are rates so low?
There is a great explanation linked below, but the real question should be: Do I want to own a house for the next five years? Some belief that home purchase prices are about as low as they’re going to be is a consideration.
You may miss the perfect home by trying to buy at the very, very bottom. Stock traders will tell you that the very bottom is elusive. Make an effort to estimate value. That will make up for the ‘very’ bottom of interest rates and houe price.
Q: Are rates expected stay this low?
The Fed has indicated that they see no rush to raise rates in the near future as an effort to stimulate home buying. Current rates are about as low as we’re going to see – ever.
In a recently published mortgage survey, more than 60% of Bankrate.com’s panel of experts predicted that rates will move higher over the next 30 to 45 days. How much higher is anyone’s guess. Last year at this time, the average 30-year, fixed-rate mortgage was 5.53%.
Q: Why do different mortgage surveys give different average interest rates?
Lenders in any given survey will vary, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Also, some surveys take into account the points paid to secure the rate.
Q: What else do I need to know?
The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. Shop not just for the interest rate and the points involved but also for the fees involved, which can vary widely from one lender to another.
Q: So is now the best time to buy a home?
The first consideration is job stability. Next, a look into the housing price crystal ball shows the potential for housing prices bottoming out in the second half of 2010. If you find the perfect home now, at the lower end of your price range (read: motivated buyer) buy it.
Play around with the calculators on my mortgage site at www.mortgage-monster.com to have some fun figuring out payments.
Read it here
Posted: December 16th, 2009 under Uncategorized.
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