David Houtsma Services for Real Estate Pros Atlanta, GA (404) 492-7740 Contact Profile
Mortgage rates have dropped over the last few weeks from 6.5% on average to 5.3%. That means now is an incredible time to buy or refinance! My favorite place to check out what mortgage rates are doing is to visit bankrate.com.
The big question everyone is asking today, is what are mortgage rates going to do. US NEWS & WORLD REPORT recently posted an article by Luk Mullins on this.
The article points to the lead economic indicators to justify the position that these are good times for those who can qualify for a mortgage. And that's true. I have seen a few mortgages in the high 4's. Many mortgages are at or near record lows.
But the dirty truth is that most of these great rates are not offered to everyone. Depending on how you bring home your paycheck, how many foreclosures have happened in your neighborhood, or if you have been through a job transition, you may not qualify for these rates.
And while that is a tough pill to swallow to those of us used to easy credit - look at the bright side. At least it gives us something positive to talk about rather than just more negative headlines about real estate.
Yes the real estate market has been hit hard - but so has the stock market. Yet we don;t have the media out there continually hammering the stock market as a poor investment choice. I still beleive real estate is the best investment. Stocks can go to zero overnight, while homes will retain some value in even very poor economic times.
But here is the question we should be
asking: not what will mortgage rates do, but what will consumers do? If the media continually pumps the idea that rates are going to the 4's - won;t everyone wait until the rate drops? With even more people sitting on the sidelines we could actually increase the pent up consumer demand for mortgages and housing purchases. What we really need is a steady flow, not just a sudden burst.
The truth for most people is that the difference between a 5.5% interest rate and a 4.9% interest rate (once you factor in the tax benefit), is relatively minor. It may just be a few dollars a month. And while every dollar counts, I certainly wouldn't quibble over $20 a month when it comes to owning the home of my dreams.
I adopted a philospohy a long time ago. and it has worked so far! Buy the right thing, not the right priced thing. It's great when you can get a good deal on what you want, but the best price doesn't always mean it is right for you. Get the house that is the right investment for you!
So what all this means is that although you may not qualify for a new mortgage today - cheer up. These good rates are likely to be around for awhile, so we have time to start working our way out of this economic turmoil. Shop for quality, and use your money to build a home and not just buy a house.
By David Houtsma Services for Real Estate Pros with Albright Houtsma & Clark LLC
Posted on January 06, 2009 09:23 AM
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