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Waiting for 4.5% Money? It Could Cost You the Buy of a Lifetime!

It floors me when buyers tell me that on the advice of their CPA or Financial Advisor, they're waiting for the new administration to bring down mortgage rates to 4.5% before pulling the trigger.

We're within half a percent of that number right now.
If someone like Secretary Paulson can't get it right (Banks' `Catatonic Fear' Means U.S. Consumers Get No Relief From TARP Plan ) what on earth makes you think that Joe Financial Advisor or Jane CPA has the ear of God?

I believe that we're in the eye of a worldwide financial storm. If you live in Florida or the east coast, you really understand the metaphor. Maybe you're thinking that the storm is over.

A mentor who lived through the holocaust in Europe used to tell me "There are possibilities in life, and there are probabilities. Possibilities are endless. Probabilities are a much narrower set of numbers. Act on the basis of probabilities.

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson mortgage expert.
Call me if I can help you with a mortgage to buy your next house: (520) 349-9090

VA Loans: 100% purchase loans for active or honorably discharged veterans
FHA Rehab loans for fixer uppers: up to $35,000 on top of the purchase price
Kiddy Condo loans instead of shelling out big bucks for your student's housing
Conforming conventional loans
USDA Rural Home Loans, including purchase loans for Manufactured Homes.

Posted by Mike Jones on 01/06/2009 05:51 AM

Comments (21)

Interest Rates in the ActiveRain Channel

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Originally posted at: Tucson By Choice!: Waiting for 4.5% Money? It Could Cost You the Buy of a Lifetime!

Post is included in group: Tucson Real Estate
Post is included in group: The Economics of Real Estate
Post is included in group: Realtors®
Post is included in group: Mortgages
Post is included in group: Just Ask Mike

21 Comments on Waiting for 4.5% Money? It Could Cost You the Buy of a Lifetime!

JAN

MORNING MIKE! Yikes -- I am often amazed at where people get information from and how much they stick with that info. I call my accountant when I need tax info - it never occurred to me to ask her about loan rates! I like the quote about possibilities and probabilities. I am going to think about that one today! Happy day to you -- Gabrielle

Hi Mike, I think we will be paying the piper for a while yet. Sellers are in denial, buyers are like sharks on a feeding frenzy. It will take more than good rates.... and good sense.

(P.S. Not being rude I hope but did I tell you to look at horsealicious.com ?) Not 'ready' yet but up for 48 hours for cosmetics, etc.

EVERY CONSUMER thinking of buying a home needs to read this.

I have mixed feelings when I hear that a buyer has a "financial advisor". The advice is often to rent and put their money in equity funds where the "financial advisor" gets a commission. Also, that "financial advisor" is often an insurance salesman, a local banker, an accountant, a parent, etc. We never really know. Once I hear the word "financial advisor", my mouth is shut on the subject.

A financial advisor who predicts future interest rates has probably been reading the national press that was suckered into the leaks by the NAHB after meeing with Paulson. Seems to me that a financial advisor should advise "how to manage one's money", not try to predict future interest rates, which is the purvue of economists. Even they don't always get it right.

I'm with Lenn. Financial advisors really want all the money. I worked with many financial advisors in the past. They really don't like real estate. I also recently asked one of my "friends" who is a financiual advisor if he ever thought of investment property for any of his clients. "Never."

I never argue with a client about their "financial advisor's advice". However, I do drop lines here and there that might get them to mull over other ideas. Thanks for the great post, Mike!

Great post and over the years I have been amazed at the people who always wait for the rate to "bottom out". When I first got in the business it was 13.5% and everyone was sure it would drop to 13%. And it did...several months later. Inventory is at an all time high and there are beginning ti be some great buys (even here in Austin where we have managed to dodge the bullet, sort of...)

Mike! Many folks I'm talking to think the 10yr TB is a bubble waiting ot pop. Okay - when is THAT suppose to happen??? It's amazing!

Mike,

Many people turn down very good waiting for great. Some call them cautious, some conservative, the truth is they're losers always waiting for a bigger and better deal!

Brenda and I bought our first home in 1971 a week after the rates went from 6% to 6.5% if we'd waited it would have been 15 years before the rate went back to 6%.

Waiting for 0.5% while renting at 100% is foolish.

Bill

I love this saying "Possibilities are endless. Probabilities are a much narrower set of numbers. Act on the basis of probabilities." We all need to be acting this way. I think this saying is going up right in front of me at my desk!!!!!!

Mike,

A bird in the hand!!! Take a great rate and run with it!!! Thanks, Fran

just a fantastic (and important) Post and title !! i am , in the old days, a stock market guy, and picking the bottom doesnt work, in fact it hurts more than helps

What is the possibility of the rate going down and being able to buy at today's prices? I suggest it is slim.

Excellent post Mike! I have noticed over the years, that as long as interest rates are in a declining state, that buyers often sit on the fence. But the minute they start to rise a bit, they are then in stiff competition with other buyers, who also NOW KNOW it's time to BUY. There are trade-offs for trying to market bottom chase.

I think buyers expect much more than they could ever receive in alot of cases. The want the home of their deams at a steel of a deel also, and have very high expectations of getting a bargain better than the extremely reduced price.

Mike - I liked this so much that I reblogged it. Good work, If it can get a few buyers off the fence it would be good for everyone.

I completely agree. Why take a chance. Rates may go way up in the future, then it will be too late.

Hi Mike...The difference in the monthly mortgage payment is not worth the risk of seeing the rate head in the opposite direction before taking action.

Terry's observation that the prices of homes might start to creep up if the rates get an lower may be exactly right.

Kate

JAN

Kate,

I agree with both of you!

Rita,

What's the phrase? Strike while the iron is hot!

Larry,

Thanks for commenting and for reblogging!

Shawn,

Right now everyone's looking for a steal. We're seeing some bidding wars again.

Myrl,

Thanks! We're seeing action again with rates as low as they are.

Terry,

Slim to none!

James,

Thanks for the encouragement!

Fran,

You bet!

Don,

So I'm responsible for some additional clutter on your desk?! LOL

Bill,

I like the way you think!

Eleanor,

At the extremes of any market, everyone's an expert! (Except for the experts. LOL) Thanks for stopping by.

Russell,

I remember 13.5% Heck, I remember 17% first mortgages.

Susanne,

That's true, isn't it? FP's see real estate as competition.

Lenn,

EVERY CONSUMER thinking of buying a home needs to read this. Amen! ReBlog it!

Susie,

Thanks for commenting; I'll look up your new blog.

Gabrielle,

Thanks for being the first to comment. Thanks too for the smile! It was a good start to my day.

Mike in Tucson

Mike - I'm going to play devil's advocate here. Some of my clients have received very good advised from their CPA's and Tax Advisors. But, those CPA's and Tax Advisors did not claim to have a crystal ball giving them insight in to where interest rates were headed, either.

Karen,

I had an interesting application today. On the advice of my client's CPA, and against the advice of his FP, the client sold everything in his stock portfolio, close to $100K worth. He's going to invest in certificates of deposit. He wants me to check with his CPA before refinancing his current mortgage from 6% to 4.75%. I'll call the CPA.

Mike in Tucson

JAN

Mike,

No matter what some may say you are precisely on target. I loved your quote from the mentor! Congratulations on being selected for the current edition of MWIR,

Ron,

Thanks for stopping by. And thanks for the encouragement.

Mike in Tucson

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