Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard
Diane Gallagher

Is now the time to buy? Are interest rates at the lowest?

Print
Font Size:
Default font size
Larger font size

Posted: Friday, June 29, 2012 1:19 pm | Updated: 1:20 pm, Fri Jun 29, 2012.

According to many economists, they are forecasting that mortgage rates will rise again later this year as the American economy gradually improves and as more global investors turn to the U.S. as a safe haven for money. Mortgage rates tend to fall when there are concerns about the economy,” said Jed Kolko, the chief economist for Trulia.

Although rates inched up this past week, home buyers and refinancers may be wondering how low rates can go — and how they can capture the best rates now.

The average rate on a 30-year fixed-rate mortgage averaged 3.71 percent the week of June 14.

The rate had averaged 3.9 percent three months earlier and 4.5 percent a year earlier.

Kolko also added that rates are at historic lows, borrowers need to understand that the advertised rates are generally for those with the best credit. “If your credit is in the mid-600s instead of the mid-700s, that could be as much as an extra percentage point on your mortgage rate.”

Those planning to refinance or buy a home in the next two or three months might want to consider locking in a mortgage rate now.

Borrowers with rate locks, with a built-in deadline, often receive priority treatment from lenders, because the borrower is telling the lender that he or she is serious about closing soon.

Lock-in costs and policies vary widely, and are based partly on the time frame the borrower wants covered. Most borrowers will need a 60- to 90-day lock.

If interest rates continue to fall during the lock period, borrowers can ask the lender to rewrite the rate lock at an additional cost, or obtain a “float-down” provision in the original agreement. A lock with a float-down agreement allows the borrower to change the rate, often only once, before closing on the mortgage. This option is generally more expensive than a standard lock.

It’s really tough for rates to go much lower,” said Cristian de Ritis, the director of Moody’s Analytics. “It’s almost unbelievable that you can get a 30-year mortgage at that rate.” Mr. de Ritis said that rates could possibly fall further, perhaps as much as a quarter of a percentage point, but he added that it was more likely that they would start “a slow drift” upward. In six months, the rate on the 30-year fixed-rate mortgage could be at 3.8 to 3.9 percent, he predicted, and a year from now, 4.1 to 4.2 percent.

“If the economy does recover more aggressively than what we think, or what investors think,” he said, “then the Fed will likely raise rates.” The next two Federal Reserve Open Market meetings, which determine credit policy, are scheduled for June 19 and 20 and July 31 and Aug. 1.

Hopefully this will help you make a decision whether to purchase now or later. Contact your local Realtor to see what’s available for you today.

Diane Gallagher is the president of the Lodi Association of Realtors and can be reached at larpres2012@yahoo.com

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.

When you’re ready, use some of these selling tips that add value to your home

You’re finally ready to put your home on the market, but want to ensure you get top dollar. Are there any easy fixes that can increase your asking price without breaking your budget? Here are some tips, ranging from free to under $1,000. Happy selling!

Posted: September 19, 2014
Comments (0)
more »

Loan Calculator

Your News

News for the community, by the community.

Featured Events

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists