While the mortgage market continues to generate a lot of talk, both in the Tucson media and in Washington, interest rates for owner occupied financing are currently near all-time lows. If you are looking to take advantage of these low interest rates, and lower home prices, now is a great time to buy a home or refinance your current mortgage. If you do not have a home to sell first, you are in a great position to buy, as there is a large inventory of quality homes for sale in the Tucson market. Many sellers are willing to make concessions, and depending on terms, you could even have some or all of your closing costs paid by the seller. If you are a first time home buyer, or someone who doesn't have a lot of money for a down payment, FHA financing is an excellent alternative. On January 1, 2009, the down payment will go up from 3% to 3.5% (which you do have to have all of this money and it cannot be borrowed). However, you can still get the seller to pay your closing costs, and can get into a new home with an interest rate in the low 5% for very little down. I recently had a client get into a two year old "bank- owned" home in like new condition for only $4,000 with an FHA mortgage.
Lately there has been talk in Washington about an incentive to home buyers of a 4.5% 30-year fixed rate mortgage. But will it become a reality? Right now, no one really knows, as it is just currently "the talk" of Washington politicians. Homeowners who could benefit from a lower interest rate need to know that even if 4.5% becomes a reality from Washington's actions, it would only be available to home buyers, not homeowners seeking to refinance at a better rate. So if you are considering refinancing your mortgage, now may be a great time to do that, as it is not clear if rates will stay low or trend upwards in the new year.
You also may have heard about a program called "Hope for Homeowners." This program has been approved by legislators to help distressed homeowners, so that they can hopefully avoid foreclosure, and also offer a tax credit of $7,500 to first time home buyers and those who have not owned a home in the past three years. Regardless of its best intentions, the program has not been embraced by investors, and it is not available to many people it could potentially help. The bottom line of "Hope for Homeowners" is that the Fed announced recently that they are going to buy up to $600 billion in mortgage-backed securities. This announcement has already helped to drive rates to historical lows. In January, the SEC is meeting. Information may be released that could have a significant bearing on rates- potentially for the worse. Currently, interest rates are extremely volatile. Fluctuations that used to take months are now occurring in just days or hours. If you don't have a loan application in process, you could lose out on lower rates.
Home loan rates are currently in the mid- to low-5% range. Home values are currently at 2003-2004 levels, and have come down significantly from their peak prices in 2005 and 2006. Therefore, it's a great time to either buy a home or refinance your current mortgage. If you have any questions about buying a home in Tucson, or would like information about refinancing your mortgage, please do not hesitate to contact me directly.
Written by Sarah Ley,
BSBA, ABR, CRS, CNHSA
Realtor with Long Realty Company
Direct: (520) 404-0544
http://www.sarahley.longrealty.com/
sley@longrealty.com
Sunday, December 14, 2008
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