June 1, 2009 Newsletter
Rates have moved up a bit from two or three weeks ago and current fixed rates are being quoted in the low fives, but for the first time in a long time, adjustable mortgages are attractive, being quoted in the low to mid four range depending on the number of years before it adjusts. It’s the first time in over a year where we can say a 3, 5 or 7 year ARM might be your best alternative. Today’s rates are still incredible, and if your rate is 6 or better you need to consider refinancing.
The purchase market is warming up and is expected to increase due to the stimulus tax credit. The stimulus tax credit is aimed at first time home buyers and therefore impacts the lower end of the market, but that has a trickle up effect (if that’s a term) meaning that individuals cannot buy a move up home until they sell their home. What has gotten the buying public excited is a statement from the government that the tax credit can now be applied at the settlement table, rather than appear on your tax return next year. For example, a first time home buyer purchases a $100,000.00 home with an FHA loan, which requires 3.5% down payment. So buyer has to put $3500.00 down, and still has to come up with closing costs. The government has said that the $8000.00 will be made available to the buyer at closing (the details of which I have not seen). Therefore, the buyer may in fact buy the house for the $3500.00, and use the $8000.00 to cover the closing costs, including buying the rate down. That is a huge advantage, which should allow qualified buyers with good credit who don’t have much in savings, to get in the marketplace.
In surveying some key markets, the news has been mostly positive, that the slide in pricing is either decreasing or has stopped altogether. That does not mean that sellers are always getting their price, as some sellers are still trying to price their homes at 2005 peak price points. What realtors have told me is that correctly priced properties are not sitting, and are in many cases getting multiple offers. This summer should be a strong market with the combination of interest rates in the 5% range, $8000.00 in stimulus credit for first time buyers and realistic pricing.
If we can help advise as to what opportunities exist, or if you are not sure how to market your home, call us. We want to be your real estate adviser as a title company and law firm, and we work with some of the finest realtors and lenders in the industry. Reach me at firstname.lastname@example.org or 410 884 1160 x 3007.