First Time Buyers, Listen Up…Two Great Reasons to Buy Now!
The times they are a changin’. It’s true…and buyers, if you’re looking to take advantage of the strongest buyers’ market in a generation, it’s time to make your move. Why? First, interest rates are on the rise. Second, 100% financing, which has been almost completely eliminated already, will be basically nonexistent if newly proposed legislation is passed.
Rates on 30-year fixed mortgages have climbed to their highest levels in nine months. Fearing inflation, the Fed has reversed it’s recent trend of cutting the interest rate. While it has not raised rates yet, the recent shift in policy has financial markets guessing as to what will come next. Indecision and a bit of confusion led to a 30-year fixed rate of 6.45%. The good news is that’s still historically low. The bad news is that it looks to be on the rise. If you’re waiting for housing prices to further deteriorate, keep in mind that even a small rise in the interest rate can lead to much higher monthly payments. Generally, it makes more sense to take advantage of the lower interest rate, rather than wait for the market to “hit bottom”, which is a guessing game at best. (http://www.oregonlive.com/newsflash/business/index.ssf?/base/business-83/121450014479870.xml&storylist=business)
Also, congress is contemplating legislation to curtail or eliminate charitable down payment assistance programs. These programs are often used with FHA financing to create pseudo-100% financing. At the moment, this is the only way I know of to do 100% financing. I won’t go into the nuts and bolts of the charitable down payment assistance programs, but understand if they go away, 100% financing will essentially cease to exist. (http://www.oregonlive.com/newsflash/business/index.ssf?/base/business-83/1214504104242530.xml&storylist=business)
What’s the upshot? If you’re thinking about buying, now’s the time. Take advantage of the current low interest rates before it’s too late. If you plan on using 100% financing, you better get moving!
If you enjoyed this post, make sure you subscribe to my RSS feed!