We have all heard that mortgage rates have been hovering in recent years at an all time low but you may have not seen that demonstrated. Take a look at what rates have done over the past 40 plus years.
Opportunities still exist to refinance while rates are low. For instance there are 15 year fixed mortgages in the low to mid 3′s%.
Rising mortgage interest rates are inevitable.
Lower interest rates especially effect 1st time home buyers who are seeking to attain a target payment… say that is comparable or lower then rent. In a scenario with rising mortgage interest rates you are forced to seek a lower price house to get the same payment and the choice of available homes can substantially shrink causing you to compromise.
If you are a seller rising interest rates can shrink your target buyer pool when they are driven to lower priced houses in order to qualify. So it is been widely publicized that the Fed is seeking to raise rates in the 3rd to 4th quarter of 2015. There will be a definite impact on the real estate market for the reasons identified above and more.
There are a wide range of available products that assist in keeping you payment low including taking advantage of low rates while they exist, minimizing or eliminating costly mortgage insurance among others.
Credit scores can dramatically effect rates and pricing. If your credit score is poor or somewhat compromised you can be stuck with a higher rate. However do not fret… with proper guidance improvements can be made to scores and sometimes quickly. It is not advisable to ASSUME that you cannot qualify because you feel your score is too low. There are many variables. There are credit management services, mortgage lenders that can work with you and proper guidance from a real estate professional from Pinnacle. Call us at 410-560-3556.
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The impact on First Time Home buying and College Debt ? Increasingly we see that college graduates are delaying their entry into the housing market and seeking that first home. Many times years of renting occurs while accumulated college debt gets paid down or off.
Studies report that once your debt related to college exceeds $25,000 you are much likely to consider purchasing a home as opposed to someone who has little of no college debt. This dilemma applies to Millennials, many of whom are burdened with with excessive debt levels. Of course coming out of college we expect a return on investment related to obtaining a college degree. Earning potential, conceptually should be permit the offset any financial impositions related to from obtaining a college degree, the cost of college. While this is generally true, the millennial generation still seems to be getting older as they enter the housing market.
There is a bit of a juggling act.
Do you save for the down payment or pay back college loans first? . If you’ve already saved up, do you use that money for a house or to pay off student loans. What are the qualifying guidelines for buying a home. If you are not aware of these how can you prepare for home ownership. What is the minimum required credit score in order to qualify for a home. How much cash does it take to make that 1st purchase and are there special first time home buyer programs to assist (BTW… Yes !)
You may want to seek guidance
Guidance could be in the form of a financial planner, tax account and a whole host of other parties including a real estate professional. We still contend that investing in a home is generally a sound investment and a tool for building additional net wealth over time. Early in the game there should be a clear understanding of the rent versus owning concept. It is very simple but often time totally misunderstood.
Our advise, make the call and explore home buying regardless of your college debt. It does not cost anything to become informed. In the short term, maybe it is not the time. But if it appears so, there can be financial and personal benefits. Call the Pinnacle Real Estate Co. today at 410-560-3556 for a no obligation meeting to explore answers to these questions and others.
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Over the past year or so we have begun to experience the economy improving. As a result mortgage rates are on the rise, posing a challenge to many first-time home buyers as well as relatively any prospective home purchaser. If you think about it even if you are a current homeowner who needs to see your home, its possible the incoming buyer will a more interest rate sensitive party.
Recent economic news such as higher than expected retail sales and the improved jobs market has raised consumer confidence has led to increased spending and economic growth in our country. The result… many supposed experts suggest the Federal Reserve will raise rates as early as the third quarter of this year in 2015 leading to interest rate increases.
A rise in interest rates means one of 2 things. Either your purchasing power is reduced or you could be pushed out of the market altogether and need to defer your purchase.
However, fear not, There are many creative financing vehicles even in an environment subject to interest rate increases. The role of an informed real estate profession is to identify all of the options. With all of that being said, the time to jump in could be now before rates rise. Choose your mortgage professional carefully. There are some incredibly creative well informed mortgage bankers and you need to seek the best. That in itself is a feat in that in recent years the mortgage banking industry has gone through some transformation. Get a good referral and them some proper guidance on the right questions to ask.
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There are always a hosts of creative home loans that become available that allow a home buyer to accomplish special goals. This could pertain to a lower interest rate that can save hundreds per month… or down payment and closing costs assistance that can help you purchase a home with limited resources… or a renovation loan that would allow you to acquire a home and immediately renovate to make it LIKE NEW. The list goes on and on and some of these programs are rolled out just for a limited time, sometimes apply only to certain circumstances and possibly limited geographic areas .
A critical element of the role of a real estate professional is to flush out these programs, clearly understand their features and benefits and then make them available to the Buyers and Sellers that we serve.
My role as the principal at The Pinnacle Real Estate Company is to seek these creative home loans and collaborate with our licensed professionals to make these programs available every day to the clients that we serve.
Take a look that this NEW program being rolled out in a joint effort between the State of Maryland and the City of Baltimore for those who wish to purchase a home in the Baltimore City.
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