Real Estate Blog
The Ups and Downs of Mortgage Rates
For the past few years, mortgage rates have reached – and remained at – historic lows. Between the low rates and federal stimulus incentives, millions of first-time buyers became homeowners and existing homeowners moved up.
The good news is that 30-year fixed-rate loans are still very low: 4.1 percent, according to USA Today on Thursday, Oct. 31. Yes, it’s a little higher than last year, but still a bargain compared to, for example, the 6.4 percent Freddie Mac reported in October 2008.
The more sobering news is that rates for 30-year, fixed-rate loans are expected to rise in 2014. The Mortgage Bankers Association predicts 5 percent next year, and 5.3 percent by early 2015. None of this should come as a surprise, and buyers should keep the prospective hike in, well, perspective.
Rising interest rates are a sign of a strengthening economy. You'd be buying a house in a more economically stable environment, which is good news. The expected rise is slow and measured, and rates will remain a relative bargain.
If you have any questions about the ramifications of rising mortgage rates, please call me, Sharon Gidley at (847) 812-5081.
On the Horizon: 5 Ways to Prep for a Home Purchase
By Katharine Davis, RE/MAX Editor
Yes, I know the leaves are falling, the temperatures are dropping and the holidays are fast approaching. But my sights are set on spring – the season when my husband and I hope to become first-time homebuyers.
Spring may seem ages away now, but fall is actually the perfect time to start planning for a post-winter purchase. In actuality, it’s less about the season – real estate isn’t tied to weather, after all – and more about the time frame needed to properly prepare.
So how to prepare?
1. Check your credit – Requesting a credit report is actually one of the easiest things you can do; clearing fraudulent activity is one of the hardest. That’s why it’s important to check your credit history early in the process if you’re thinking about buying. If you find something negative on your report, it could take months to clear things up. The U.S. government allows for one free report each year from each of the three national credit bureaus – TransUnion, Experian and Equifax. Visit annualcreditreport.com for your free reports. It's a great first step.
2. Pay down debt – This might seem like a no-brainer, but banks don’t want to see that you have a whole lot of stuff and not a whole lot of money. Banks need to know you’ll be able to pay their loan first and foremost, and they like to see a high credit score, which debt negatively affects. So start paying off those credit cards, and put off purchasing that new car or making any other major purchases until after you’ve secured a mortgage. Speaking of mortgages…
Reality Check: Why Home Inspections Matter
One of the best pieces of advice you can heed when it comes to buying a house is to order a home inspection. Regardless of whether you’re a first-time homebuyer or an old pro, you might have on rose-colored glasses when it comes to buying a house – your future home. Luckily, a certified home inspector has no emotional attachment to your new place and can impartially and appropriately identify structural, electrical and plumbing problems. Plus, this person can offer insight into the safety and value of the house.
When is my home actually sold?
When you are selling your home, it is important to realize that until all counter offers have been agreed to and the purchase agreement has been signed, your home is not officially sold. So, even after you have accepted an offer from a buyer, you should keep your home on the market.
Keeping your house on the market is wise, because even though an offer has been accepted, you still have to go through the escrow period. This escrow period can last from one week to several months, and during this time the sale of the property is still pending. The house isn’t technically sold until after the close of the escrow. So, it is best to keep the market informed that the sale is only pending. That way, you may have a chance to receive backup offers, in case the initial sale falls through.
As the seller, keeping your home on the market until a sale is finalized keeps you covered. But, in the end, if all the paperwork has been approved and the sale has been made official, your initial buyer’s offer takes precedence over any backup offers.
If you have any questions about selling your home, please call me, Sharon Gidley at (847) 812-5081.