Best time to buy or refi, but time is running out!
We have all lived through MANY changes in 2009, not all good. However, we are at a critical point in the real estate and credit markets where it is the best time we may EVER see in which to buy a home or refinance an existing loan. Why? Rates are within ¼% of all-time lows, inventory is high, and the Federal Government is offering HUGE tax credits to first-time and move-up buyers.
BUT THIS IS ABOUT TO CHANGE AND YOU REALLY NEED TO BE AWARE!
FACT – the sole reason mortgage rates have remained low is because the Government committed to buying $1.25 TRILLION in “Mortgage Backed Securities” from Fannie Mae and Freddie Mac. This Program officially ends March 31, 2010. I guarantee you rates will increase swiftly and dramatically at that time. I expect rates to be about 6% by springtime and about 6.5% by autumn – up from the “4.somethings” we’re seeing now.
FACT – to qualify for the Federal Tax Credit of up to $8,000 for first-time homebuyers and up to $6,500 for move-up homebuyers you MUST have a formal contract in Escrow before May 1st. Given the activity I saw last November (before the extension) there was a noticeable run-up in prices and reduction in Seller concessions.
FACT – credit guidelines for Conventional, FHA & VA loans continue to tighten, while costs to obtain these loans increase. Effective April 5th, FHA is increasing the cost of their Up-Front Mortgage Insurance by ½% so, for example, the cost to purchase or refinance a $150,000 loan will cost you $750 more! And they’re not done; effective “early summer” FHA is increasing the cost of the Monthly Mortgage Insurance (amount unknown).
There is no other way to get across the TRUE message out other than for me to say:
- If you are considering buying a home, I STRONGLY SUGGEST that you get in contract and lock in your rate in the next 45 days.
- If you are considering refinancing your mortgage, I STRONGLY SUGGEST you proceed NOW! Rates are drifting higher and will continue until March 31.
If you or someone you know is considering purchasing a home or refinancing their existing mortgage please pass along this information. I cherish your trust and appreciate the opportunity to be of service to you, your family, friends and co-workers!
Call Todd Abelson and Tyler Ford at Sunstreet Mortgage in Tucson, Arizona for all your Mortgage Needs!