Jim Esposito Agent Shot

Jim Esposito

Intercoastal Realty

(954) 336-3776

housing market updates

search florida homes for sale


fort lauderdale real estate news

Home    


Like This Blog? Click Here to Share with Your Friends and Colleagues

 

Help Me CRUSH My Competition



Ft Lauderdale Real Estate News 10/12/13


how to get the best mortgage key factor in how to buy a new home


After riding a swift updraft earlier this year, mortgage rates have steadied at around 4.5 percent for a 30-year fixed loan.

But there’s a good chance they’ll resume their upward path. That’s one of a number of things borrowers need to know now to get the best loan.

“For planning purposes, if I were thinking of getting into the market next spring, I’d be working with numbers in the 5 percent range,” said Keith Gumbinger, vice president of HSH.com, a Riverdale, N.J.-based publisher of mortgage information. That would be up from around 3.5 percent earlier this year.

The market got some rate relief recently, when the Federal Reserve decided to continue its policy of buying bonds to keep mortgage rates low, in an effort to stimulate the housing market and the economy.

But the Fed has also made it clear that it will taper off such buying at some point, as the economy improves.

So does that mean buyers should speed up their timetables and jump into the market before rates start to rise again?

Not necessarily. For one thing, analysts aren’t predicting a huge increase.

And the mortgage rate is “only one part of the (home-buying) transaction,” Gumbinger said.

For most people, the decision to buy or sell is less influenced by the financial markets, and much more influenced by what’s happening in their lives: a new job, marriage, divorce, or the birth – or departure – of children, said Greg McBride, an analyst with Bankrate.com.

And even if rates start to rise, they are likely to remain affordable, by historic standards.

“Mortgage rates are not, and won’t be for some time, an impediment to well-qualified borrowers,” McBride said.

“If the difference between a 4.5 percent and 5 percent rate on your mortgage is the difference between being able to afford a home or not, you’re stretching yourself too far.”

Given the changing mortgage landscape, here are five things borrowers can do to get the best deal:

Do your homework: The first step is to check your credit report with the three credit reporting agencies.

You can do it for free at AnnualCreditReport.com. If there are any errors, correct them. Then do what you can to improve your credit rating by paying down your debt.

Avoid borrowing to buy a car or other big-ticket item in the months before you apply for a mortgage – and, for that matter, up to the date you finally close on your new home.

You can check your credit score at MyFico.com for $19.95. Anyone with scores below 620 will find it very difficult to qualify for a mortgage; borrowers with scores over 740 qualify for the best rates. It’s a good idea to try to improve your score in the months before you apply for a mortgage, because even a 20-point improvement can make a difference in the rate you can get, according to David Stein, chief operating officer of Residential Home Funding in Parsippany, N.J.

Be ready to offer up a lot of paperwork to document your income, debts and assets. Regulators have cracked down since the housing boom free-for-all, when unqualified buyers and borrowers got or refinanced mortgages they couldn’t actually afford.

Now, borrowers need to show one month’s worth of pay stubs, two months of bank statements and two years of tax returns, according to Stein. During the housing boom, Stein said, lenders “weren’t looking at anything – now they’re looking at everything.”

Then shop around among several lenders for the best rate.

Get preapproved: Even before you start looking for a house, you should get preapproved for a mortgage. This will make you a stronger buyer, because sellers will know you have the financing in place to move forward.

In addition, getting preapproved for a mortgage amount “sets boundaries around what you can afford. Those boundaries dictate what your price range is,” said McBride.

Choose between rates: The standard loan offers a fixed interest rate for 30 years. Adjustable-rate mortgages (ARMs) offer a fixed rate for, typically, the first five or seven years; after that, the rates can rise every year. In exchange for accepting the risk that interest rates will rise, borrowers get a lower initial rate on ARMs. According to the Mortgage Bankers Association, ARMs make up about 7 percent of the current market. But ARMs make sense only for people who know for sure that they’re going to be in the house for a limited time.

“Forget about adjustable rates altogether unless you have sufficient financial stability that you could absorb a higher monthly payment if your timetable doesn’t pan out,” McBride said.

Decide length of loan: Fifteen-year loans are more popular with refinancing homeowners than they are with first-time homebuyers because many buyers can’t afford the higher monthly payments. The reward for those higher payments is that over time, you’ll pay much less in interest by shortening the life of the loan. And 15-year mortgages come with lower rates.

Sammy Thomas, a consultant living in Ridgewood, N.J., wasn’t looking for a 15-year mortgage when he decided to refinance as rates dipped last year. But with rates on 15-year mortgages then hovering around 3 percent, he decided that was the best deal. The shorter loan also meant that he and his wife, Demi, a teacher, could live mortgage-free sooner. That was especially appealing as they plan for their retirement, said Thomas, 58. In fact, they hope to put extra money on the loan each month and have it paid off in 11 or 12 years.

Lock in your rate: Once you’ve found a good rate, consider locking it in, which you can usually do for no cost, or for a fee that is refunded at closing. It’s not worth betting that rates will fall before you close on the house.

“I rarely tell folks to try to time the bottom of the market,” Gumbinger said. “Mortgage rates almost always rise much more quickly than they fall.”

“Don’t try to guess the way rates are moving,” McBride agreed. “I’m not a fan of people rolling the dice for something as significant as what their mortgage payment is.”

Copyright © 2013 The Record (Hackensack, N.J.) Distributed by MCT Information Services




To see more great real estate investments go to

Investor Central




HyperSmash
Pingates

Find out more at:

http://www.fortlauderdalebeachproperty.com


If you are not on the phone to me right now
you are costing yourself money


a high rating realtor I specialize in the location
of the best deal on luxury and waterfront real estate
in ft lauderdale, boca raton and south florida


Jim Esposito

Intercoastal Realty

the best ft lauderdale realtor

(954) 785-8558 Office
(954) 336-3776 Mobile


emailadd1

Great Deals    

Property Search    

Selling Your Home    

Foreclosures    

Free Lists    

Downtown Ft. Laud    

Neighborhoods    

Condos    

Income Property    

Investor Central    

Rentals    

Real Estate Blogs    

Webcams    

Links    

Client Log In    

Contact    

 

FREE!
FORECLOSURE
LISTINGS!

Updated Weekly!


Click Here!

12 Things
You've Got
To Know
Before Buying Foreclosures


Click Here!


Read Our Exclusive
& Informative Guide

How To Buy
Foreclosures


APPROVED
SHORT SALES


The Next Best Thing
to Foreclosures

In Some Ways
Perhaps Even Better


A whole new class of
Distressed Property

And they are

Ready To Go!

 

Free Lists

Click Here!


 
 
 
 

1500 East Las Olas Boulevard
Fort Lauderdale, Florida 33301

Jim Esposito

fort lauderdale homes for sale

(954) 785-8558 Office
(954) 336-3776 Mobile


emailadd1

Home  ♦  Selling Your Home  ♦  Property Search  ♦  Great Deals  ♦  Foreclosures  ♦  Income Property  ♦  Investor Central  ♦  R.E. Blogs  ♦  Webcams  ♦  Links  ♦  Contact  ♦  Sitemap