Mortgage Rate News

Image by TheTruthAbout… via Flickr

If you are thinking about buying a home, now is probably the time to do it. Recent numbers show that both existing home sales and new home sales have increased in recent months, and that means that the housing market may begin its recovery soon. Indeed, even home prices saw an increase recently. Depending on the market you are in, it is possible that the amazing deals being seen right now may not last too much longer. This means that it’s time to make your move. But go careful. You want to get the best home mortgage loan for you.

Jeremy at Generation X Finance has a handy guide on how to get the best home mortgage loan. Some of the things he suggests include:

• Check your credit score and report: You want to make sure that you know your credit score, and what’s in your report. Clean up any issues and fix any mistakes. A good credit score will allow you take advantage of the best rates.
• Figure out what you want: Get an idea of what you can truly afford in terms of a mortgage, and what kind of mortgage you would like. Know what will work best for you, and what the interest rates are right now on the different types of mortgages. For most people, some sort of fixed-rate mortgage works best, but there are some that may benefit from other types of mortgages.
• Shop around: Take your basic information to different mortgage lenders get some initial ideas of what they can do for you. This way, you get a general idea of what is possible. Narrow down the possibilities.
• Get your documents together: Next, get your stuff together. Tax returns, W-2 forms, bank statements, investment account statements and employer contact information will be needed. You will need to have this in order to get approval for a home loan. Having it at the outset can smooth the way — and give mortgage lenders a better idea of the best possible rates.
• Pre-approval: Up to this point, you have been getting pre-qualification. No hard check on your credit, and the mortgage lenders giving you quotes based on what you provide them. When you are ready, you get pre-approved, which means that the bank provides you with something you can take to sellers to show them that you are serious.
• Study the Good Faith Estimate: This should itemize closing costs. Watch out for excessive fees and junk fees. If it looks like this is going to increase the cost unacceptably, you might have to move on.

Image via Wikipedia

The housing data that many have been looking forward today arrive, bringing optimism about the housing market. Indeed, today’s existing home sales data showed a rather significant surge. Apparently, already lived in homes are in high demand. CNN Money reports on the housing market:

“The housing market has decisively turned for the better,” said Lawrence Yun, NAR’s chief economist. “A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales.”

There are a great many factors combining to create a market that is improving. Indeed, the housing market is benefiting from the fact that foreclosures and slowed demand in general have created a situation where existing homes are much less expensive than they have been in the past. Sellers are motivated, and offering good deals. On top of that, mortgage interest rates have been near record lows. Even on weeks when the mortgage rate heads higher, it is still lower than it has been in years.

And, of course, there is the government tax credit for first-time homebuyers. This $8,000 tax credit is even available for immediate use. The fact that the government made the decision to allow the tax credit to be considered as part of a down payment doubtless played a role in July’s existing home sales data. After all, it helps to have a larger down payment, and the savings from interest charges and lower prices combine to make home ownership very attractive.

Many first-time homebuyers realize that now is the buying opportunity of a lifetime. However, it is also important to be careful. Even though the opportunities are great, it is vital to take it carefully. Make sure you truly can afford your home before you buy. Consider home ownership, and your reasons for buying. If you can afford a home, and you are at a point in your life where it makes sense, you are likely to get your best deal now.

This week has seen another change in mortgage interest rates and in the number of mortgage applications seen. Mortgage rates have fallen to 5.12%, reports Freddie Mac. This is on a 30-year fixed loan. The 15-year rate is 4.56%. In addition to falling mortgage rates, there has also been an increase in mortgage loan applications, reports Bloomberg:

Falling home prices and a government tax credit for first- time buyers are bolstering tepid demand. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan rose 5.6 percent to 527 in the week ended Aug. 14, the Washington-based MBA said yesterday.

Refinancing is very popular right now, as people decide to take advantage of lower mortgage rates. And, for those with FHA serviced mortgage loans, it is possible to get refinanced even with negative equity. I just received notice that my home has actually appreciated in value, and I am seriously considering a refinance. Plenty of first-time homebuyers are also finding that there are incentives to take the plunge right now. Paying points up front can even help buyers get the best possible mortgage interest rate.

Refinancing: Improve your credit score

Refinancing is a bit more difficult right now. In order to get approved for some kinds of credit, you need to have a good credit score. Many creditors and lenders have increased their credit requirements, making it difficult to get approved for loans. In order to get a good interest rate, and in order to get approval, you need to have good credit. It can take 30 to 90 days to see a substantial difference, and you may find that you need to make big changes in order to sufficiently move your credit score higher.

However, if you can buy or refinance right now, you have the chance to save a great deal of money in interest payments.