We
have seen one of the most volatile months in mortgage rate history as the rates
continued to rise, which has left many first-time home buyers with questions to
know what to do, especially with rates projected to inch higher in the future.
It
is important not to react to any rise in mortgage rates, especially now, even
though mortgage rates are definitely a deciding factor for many
would-be-buyers.
Even
after all the historical increases, mortgage rates are still historically very
low - which is a fact that is partly the result of the qualitative easing
"bond buying" policy implemented by the Federal Reserve. According
the Erin Lantz, director of mortgages at Zillow, that chain rates are not going
to drastically climb in the near future.
"Even if the Federal Reserve starts to scale back its stimulus program, the Feds will still help keep rates low for the remainder year in order to accelerate the housing market recover," Lantz said. "As the Feds withdraws support and the economy recovers, we expect rates will rise gradually over the next 18 months.
So
it is important to be reasonably patient and in the mean time, work at putting
all your ducks in a row.
Why be patient?
According to data from the Mortgage Bankers Association as
reported by Daily Finance, applications for mortgage refinancing took a 15
percent hit - a figure that, as mortgage rates rise, we can expect to drop.
Surprisingly however, mortgage applications for new home purchases rose by 3
percent. As first-time home buyers clamor to lock in a low mortgage rate, many
end up paying the same, or more, and for a home they really didn't want because
they rushed into a deal that favored the sellers. If anything is certain in real
estate, buyer impatience favors the seller.
If you are eager to own a home but want to make a wise decision and not sure where to begin, ask your real estate agent for a list of their preferred lenders and go through the mortgage pre-approval process. Then, you'll know what you are able to spend without breaking the bank.
If you are eager to own a home but want to make a wise decision and not sure where to begin, ask your real estate agent for a list of their preferred lenders and go through the mortgage pre-approval process. Then, you'll know what you are able to spend without breaking the bank.
No comments:
Post a Comment