Nato's Mortgage Rant

    Mortgage rates are on the rise and by the looks of it all, they may continue climbing even higher.  If you are a homebuyer or are looking to refinance your home, if you have been sitting and not taking advantage of the current low rates, your time may be running out. 

    Low rates are still being advertised by lenders and banks, but as the market is indicating, rates are increasingly going up.  "If you want to refinance your mortgage into a loan with a sub-5% interest rate, better hurry.  Your window of opportunity is closing fast." states Les Christie, staff writer for CNNMoney.com.  "Interest rates are up and they're not going to go down below 5% again," states Mark Zandy, chief economist for Moody's Economy.com.   

    One of the main reasons rates have remained low up to this point is because the Federal Reserve has been purchasing mortgage backed securities since for most of 2009.  "But the Fed's program lapses March 31, (2010) when it cedes the playing field to private investors, who will almost surely demand higher rates", continues Les Christie, staff writer CNNMoney.com.

    In a separate article in MarketWatch.com, Kansas City Fed's Thomas Hoenig "calls for rate hikes, starting soon" "spelling higher U.S. interest rates."

    In another article on RealTrends.com, "The Fed believes mortgage rates will rise about three-quarters of a percent to about 6 percent, Boston Fed Eric Rosengren said recently".  Some experts are predicting rates may rise even more than that.

    What does this mean?  It means that if you're one of the people still sitting on the fence to buy or to refinance, your time is now!  Don't wait and lose out on the opportunity to save what could translate into thousands of dollars over the long term.  Get Pre-Qualified today!!

    A survey of recent buyers and sellers conducted by the National Association of Realtors shows that first-time purchasers are becoming more important to the real estate market now.

    First-time buyers made 47 percent of all home purchases in 2009, says NAR.  As recently as 2006 they made up just 36 percent of all U.S. buyers.

    Several factors are behind this change.  Low rates and great home prices are making housing more affordable.  Government tax breaks for first-time buyers also are encouraging renters to move soon. 

    Most of all, it shows that a new generation of owners understands the importance of having your own home.  A typical first-time buyer is 30 years old, according to NAR, and almost half are married.  Repeat buyers on average are 48 years old and almost 70 percent are married, add NAR.  A typical buyer moves twelve miles from his previous residence.

    Homes that were bought recently tended to be 18 years old and 1,800 square feet in size.  Most were single-family houses build in the suburbs.

    Buyers on average expect to stay in their houses for a decade.  But purchasers aged 18 to 24 see themselves moving in seven years, while owners age 45 or older plan to stay put for 15 years.

    Real estate agents and the Internet were the main information sources used by home purchasers.  Typically they spent twelve weeks looking at properties before signing a contract.

SMART PURCHASE

    More than 85 percent of recent buyers say that owning a home is a good financial investment, adds NAR.  Most agree that real estate is a better investment than stocks are.

    On average, sellers had lived in their house for seven years, according to NAR.  Most commonly they were moving because of a new job, or they needed a larger home.

    Sellers who had lived in their homes longer had built up more equity in them.  An average seller's equity was 27 percent of the property's sales price.

-Nato Ruiz

    Any homeowner with an adjustable-rate mortgage which will reset soon should consider refinancing at today's low rates.  You should stay with your current loan only if you're certain you'll move before the payment on your adjustable mortgage goes up.

    Many owners prefer 30-year mortgages - and their rates recently were 1.2 percent lower compared to a year ago!  Refinancing now would let you save $186 each month on a $250,000 home loan.  You'll enjoy peace of mind knowing that your payments won't rise while you're living there.

FIT YOUR NEEDS

    If you anticipate moving due to a job change, retirement, or growing family within five years, you can save more by refinancing into a new adjustable mortgage with payments which don't change for five years.

    Homeowners who prefer to pay off their loan quickly can opt for a 15-year mortgage.  Rates on those loans recently fell to the lowest levels ever recorded, states mortgage investor Freddie Mac. 

    Refinancing can provide savings for homeowners in different circumstances today.  I'll be happy to show you how a new mortgage would work in your situation.

    Additionally, I'll review your credit report with you and suggest ways to increase your score.  But it's important to call me soon, since we don't know how long today's great rates will be available.

-Nato Ruiz

    Record-low mortgage rates are making it easier for Americans to buy a home, or refinance their existing loan.  All-time lows on a variety of home loans recently were reported by mortgage investor Freddie Mac.

    "Interest rates for 30-year fixed mortgage loans tied and all-time record low while both 15-Year fixed mortgages and 5-Year ARM's broke their corresponding records", says Frank Nothaft, Freddie Mac's chief economist.

    Low rates make it easier to obtain affordable monthly payments on a great home.  Housing affordability "is now at it's most favorable point for buyers since 1970", writes columnist Kenneth Harney.

    More than three out of four U.S. households can afford a starter home today, adds the National Association of Realtors (NAR).  Expanded tax breaks for buyers also are encouraging more Americans to purchase a house now.

        Purchases are picking up as a result.  NAR says that pending home sales have gone up for nine straight months.  Home sales are forecast by NAR to rise about 15 percent in 2010. 

    Real estate values are firming and demand strengthens.  A government report states that "U.S. house prices rose modestly in the third quarter of 2009."  Another national study shows four straight months of rising home prices.

    In a few years, we'll most likely look back at today as being a terrific real estate buying opportunity.  Let me show you how it's possible to move into a home you'll love right away!

-Nato Ruiz

Existing homeowners - as well as first-time buyers - now can save thousands of dollars when purchasing a principal residence by April 30, 2010. 

First - time home purchasers can save up to $8,000 in taxes, while owners who've lived in their house at least five years can save as much as $6,500.

    Benefits are reduced for married couples whose modified adjusted gross income is more than $225,000 and singles earning over $125,000.  You also can't qualify for the credit if the home you purchase costs more than $800,000. 

In addition to reducing the cost of moving into a new home, these expanded tax breaks make it easier to secure your financial future.  Here are some unique ways to use the tax breaks -

• Current homeowners can receive the credit of they're downsizing to a smaller home.  You also can qualify for the credit when you pruchase a townhouse or condominium.
• Parents can help children buy their first home by co-signing their mortgage.  Yet the children can still receive the first-time buyer tax break.
• Renters who had been owners up until a few years ago can qualify for the $6,500 tax credit.  You must have owned and lived in a house for five consecuteve years out of the last eight.
• First-time purchasers can be anyone who hasn't owned their principal residence for the last three years.  Households who plan on buying within a year or so may want to purchase now in order to take advantage of these savings.  Persons near retirement age may want to move into a smaller home and sell their current house for a nice profit. 

    You'll then have more funds to retire on, since home equity makes up the bulk of most household's net worth.  Married couples also can have a tax - free gain of up to $500,000 when selling their principal residence, and singles qualify for $250,000 in profits without paying capital gains tax.

    When combined with today's low mortgage rates and attractive home prices, these expanded tax credits make today an excellent time to plan a move.  If you've ever thought about purchasing a home over the past few years, you'll find current buying conditions are better than they've been for quite a while. 

    I'll show you how these tax credits make it easier for you to realize an affordoble purchase.  Contact me soon, since these breaks are scheduled to lapse on May 1, 2010. 

-Nato Ruiz, Mortage Banker

Big Valley Mortgage

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