Posts Tagged ‘getting a mortgage’

Interest rates are low- super low. How low? Low enough you can pay today’s prices for a smaller payment than 2008 prices with 2008 interest rates.

Last week’s rates for a 30 fixed with 20% down and a half point was 3.625%. With good credit of course. A few weeks ago you could get a conventional mortgage for only 3.5%

But they won’t stay this low forever. As the housing market, and economy in general, improve the rates will go up. I doubt they will ever get back up to the 9+% they were when I got my license, but to put things in perspective the average rate during peak price time of 2003, 04, 05 was right around 5.8%. The National Association of Realtors (NAR) projects interest rates will get as high as 5.4% by the end of 2015.

What this means for you, the home buyer: If you can afford a $500,000 house today you will only be able to afford $405,000 at the same payment. You don’t like what you’re looking at for $150,000 today, be prepared to stay under $120,000 if NAR is right.

See the charts below for an idea of how your buying power diminishes as interest rates go up.

buyers purchasing power 300k March 2015buyers purchasing power 150k March 2015buyers purchasing power 500k March 2015Jackie@JackieHawley.com



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The Best Loan Officer Isn’t Necessarily The Cheapest

If you are shopping for a loan officer for your Oakland County MI home purchase, you need to get a good faith estimate and have him/her go over the figures with you. If you get good faith estimates from more than one loan officer and one of them is much cheaper than the others, you need to ask why. In fact at that point you may want to bring all your good faith estimates to your buyer’s agent and get a second opinion, because there shouldn’t be a major difference in prices.

If you have two good faith estimates and they’re fairly close, don’t choose your loan officer solely on the costs. Sometimes going on the cheap can cost you more in the long run. We recently had a buyer choose to go with her credit union loan officer instead of our preferred lender and it cost her $50/day for each day we went past the to close by date. We went 2 weeks past the to close by date in the purchase agreement- or $700.

Another buyer who recently went with the cheapest lender ended up paying for a second appraisal and the time spent in appraisal review caused the buyer to have to pay for a rate lock extension and for me, his agent, to have to beg an extension from the seller. Thankfully the seller was a live human being- not a bank or a short sale.

Both of these buyers saved a few hundred dollarsuntil the problems started. It not only cost these buyers more in money, but the cost in headaches, stomach aches and stress in general was- priceless.

The Top 10 Reasons to Use Our Preferred Lender

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