Lower Rates For Home Loans:

Purchasers and Refinances Benefit From Interest Rates, But Is It Time For You?

The recent talk of the town in the mortgage and real estate industry has been lower home loan rates. Though rates currently sit above the recent lows, there has been a substantial enough move downward in interest rates to propel many new applicants to attempt to refinance their current home loans. As well as to initiate home buyers to make a move to purchase.The question may now be is it the right time for you to make a move as well?

Home Purchase

There are many opinions out there in regard to the purchase of a home and the current real estate market. With much of what is being reported, just speculation at this point. What we do know is that interest rates are near historical lows currently and the long term probability of them staying low, say this time next year is perhaps unlikely.

Also, the $7,500 first time home buyer tax credit is due to expire on June 30, 2009 and there have been no talks of an extension on this one time credit.

With the market full of low priced properties and opportunities for deals on many properties, such as bank owned homes. There is also the ability for home purchasers to drive down their new payments even lower.

Verdict: If you are a home a buyer and looking to purchase a home to live in, now may be the time to purchase to take advantage of low rates, low prices and tax advantages while they still exist.

Home Refinance:

As interest rates have dropped the amount of home loan applications has swelled with home owners looking to refinance into a lower interest rate loan, with a fixed term. The question is, is this the right time to refinance for you?

First, you must make sure that you can qualify for a home loan. Mortgages are not impossible to obtain in today's market, but you must be able to document income, have a decent credit score and some equity in your home to qualify for the best interest rates.

Second, if you have an adjustable rate mortgage, now is the time to refinance out of it into a fixed rate loan. Even if you still have a little time left until the adjustment period of your loan begins, there is no telling what will happen with rates going forward. And history tells us that rates will rise again sooner or later, making this the time to refinance if you have a fixed rate loan.

Additionally, if you are looking to take out a new mortgage to consolidate debt, now is an opportune time. You will pay a slightly higher rate for this type of mortgage, but that slightly higher rate may be even higher if you wait, since Fannie Mae and Freddie Mac have implemented additional price adjusters soon to hit these types of mortgages.

Finally, if you are just looking to refinance for a lower interest rate you must first evaluate your situation. All refinances will include some form of closing costs or if not you will pay a higher interest rate for a no cost loan. Most refinances will involve closing costs for the lowest rates and as such you must factor the cost of the refinance, against the monthly savings and the amount of time you will stay in the home.

For instance, if you were to recoup the cost of the loan over the next 12 months (via the monthly payment savings) and planning on staying in your home for the next five years, than this would be a worthwhile refinance.

Verdict:  All situations will vary, but if you are looking to refinance from an adjustable rate loan to a fixed rate, do a debt consolidation loan or can recoup the cost through monthly savings in a sufficient time frame, then a refinance may be the best option for you.

There are no clear cut answers as to where interest rates are heading going forward. However, if the mortgage market has taught us anything it is that is unpredictable in nature. Given that fact, it may be time to look into taking advantage of low interest rates while they last.

For more information on current mortgage programs, rates and more, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com