HOME OWNERSHIP MAKES MORE FINANCIAL SENSE THAN EVER.
First Time Home Buyers - It's time to buy a home. The average interest rate for a 30 year fixed mortgage is about 4.750% on a national basis (Source: Chase Home Mortgage).
All home buyers who do not have a home to sell are in the best position to buy a home with good interest rates than in many years. Foreclosures and Short Sales have made homes available at prices not seen since about 2003 in many areas.
Most First Time Home Buyer programs are available to home buyers who have not owned real estate for the previous 3 years. The low rates make home ownership very competitive when compared to paying rent.
Additionally, the mortgage interest tax deduction will help you make your mortgage payment. Home owners are entitled to an additional tax deduction for federal taxes for each $2,000 of mortgage interest paid. Further, local real estate taxes are also deductible. We recommend that prospective home buyers check with the payroll office at their place of employment to calculate the additional cash in your paycheck by changing your Form W-9 to reflect mortgage interest reduction of withholding.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.
"I love it Honey, can we afford it?"
"Yes, Dear. The payments will be less than our rent."
Hi Lenn...If that does not encourage some potential purchasers to get on the ball nothing will.
I was given a guote of 4.875 today for a 30 year fixed with no points.
Kate
Lenn - I agree with you. Now if we can just get the media to stop talking about 4.5 percent loans, maybe buyers will show a little urgency.
Lenn: fabulous post! I HOPE the First Timers listen to YOU. It is a perfect time to buy!!!!!
Kate. I got a quote of 4.75 with 3/4 pt. for a buyer today. I hope we can get the contract accepted soon.
Chase has 4/75% on their web site today.
Larry. That **^$^&(*() 4.5% rate was a fig newton of the NAHB and they got the media to pick it up and run with it.
Lenn all I can say is the prices may still fall further and a lot of people are counting on this. I see no impetus to make rates increase anytime soon.
Hi Lenn - Thanks for the great graphic. It certainly drives "home" the point that interest rates are lower than they ever have been in the last 25 years.
I think interest rates are way too low for the risk right now. I'm not complaining but am afraid that they can't stay this low for long.
Ask yourself. If you had $400,000 hanging around, would you feel comfortable lending it out to a home buyer and tieing it up at a measly 4.5% for the next 30 years. Who in their right mind would take that risk for so little. The buyer could lose his job or not be able to afford proper maintenance. 20% down seemed like a huge cushion a few years ago but it looks like a slim margin of safety now after seeing prices drop so much. In a few years we could be hit with big time inflation from all of the money that is being created. There are just too many risks to me to accept such a low rate of return on my money.
For whatever reason, money is really cheap now. If you think your cash flow is somewhat secure, this will be the chance in a lifetime to lock into such low rates.
I guess a bunch of the would be re-fis are waiting for 3.6% or something LOL
I refinanced my home, six years ago this month. We have a 5.25, 15 year mortgage. I did call my broker to find out what today's rate would be. Would you believe it? The same. The 30 year mortgages seem to be lower than the 15 year. I'll keep watching, it may just change in the next 60 days. Hoping! Thanks, Lenn.
It's a Good Life!
Fran
Lenn - this is a terrific graphic for interest rates. Even more interest when you look at the trend just in 2008 heading into 2009. But I suspect the rates are not going to remain as low as they are for long.
Jeff
Lenn, great chart and info. I hope to see them come down further yet.
Lenn...
Wow, it doesn't get explained any easier than that!
Lenn, what a great graphic. I'm a visual guy myself and nothing drives homw a point like a good bar chart or pie chart. Considering these rates are for 30 year fixed people should be jumping all over them. The last time I remember them this low they were for ARMs.
Lenn, that chart SCREAMS out to go out and buy or invest in real estate.
Lenn- Lower homes prices coupled with lower interest rates - sounds like a buyer's opportunity market, to me. What are they waiting for??
Lenn - a picture says a thousand words. This says, "What are you waiting for? Buy now if you can!"
No doubt about it - interest rates are a compelling reason to buy now.
Lenn, look for 4.5% withno points by June 1, 2009. At this time prices will start to plain out.
John. The problem with your position is that, by the time folks see the bottom, it has already begun to go up. We don't know the future. What we DO know is that the opportunity is here NOW to lock into a great rate for a long time.
Jon. Indeed. This is truly a case where the snoozers will be losers. So what if, after one locks into a 4.75% rate the rates then go down to 4.5%? Seems to me that is a better result than not locking now and seeing them to back up to 5-5.25% in a spurt that we know can happen.
Seems to me that there is more risk that they will go back up than that they will go farther down.
Tim. I agree completely. The risk is not that they might go lower if the buyer locks in now. The risk is that they will go higher if they do not.
Fran. I don't know who your broker is, but my buyer yesterday had a choice of 4.75% for 30 year or 4.375% for 15 years from two mortgage companies, Wells Fargo and Chase.
John. I'm too risk averse to rely on folks looking into the future. Work with what IS, not what we hope it will be.
Randall. Funny. I suspect that some of the folks waiting for that magical 4.5% are procrastinators who will still be waiting after rates get to 4.5% and then back up to 5.4%.
Jeff. I agree. Fact is, I don't know, but the risk that they will NOT go lower removes the attractiveness of waiting longer.
Tim and Pam. I believe that they are low enough for the average home owner to benefit greatly with what is there today.
Richard. Thanks. I love graphs.
Ken. I DO remember rates this low before. I assumed a 4.5% VA loan on a home in North Arlington back in about, about, about ....mmmmmm, a LONG TIME AGO.
Gary. By George, I think he's got it!
Marilyn. Beats me.
Sharon. Indeed. If folks can find a home they would want to live in for some years, they need to grab it.
Ryan. Low interest rates coupled with high inventory make a buyer's market supreme.
Scott. Or, not.
"Yes, Dear. The payments will be less than our rent." Great statement....I believe this is a big factor in determining affordability. It is something the consumer can relate too. I hoping we can get the retail buyer back in the game.
Mark. From your lips to . . . . .
Not only is it the best market in decades for first time home buyers, it's a great market for move-up home buyers. Yeah, I know they will sell their homes for less now, but they are also able to purchase that move-up home for less. There's a good chance the move-up buyer can buy a home today that they won't be able to afford two years from now because both prices and interest rates have risen.
Alan. It all makes sense until the move-up buyer realizes that they can't sell for what they owe.