01 Jan, 2009
Waiting For Mortgage Rates to Fall? Don’t…
Posted by: Scott Swinford, Mortgage Planner & Credit Expert In: Real Estate Finance| credit
With thanks to Dan Green, here are several reasons you should not wait for mortgage rates to “fall”…
Last month, we saw mortgage rates dip into the mid 4% range…. for a couple hours. If you were lucky enough to get locked into that rate during that time, I would like to congratulate you. If not, well… there’s always next time, maybe.
Although rates are in fact trending down, it is impossible to predict what they will do day to day, much less over the next several weeks or months. It is important to be able to lock those low rates when they appear, as they could disappear just as quickly.
Want in? Here’s what you need to do.
- Fill out an application and get me the information that I need to make an informed decision about whether or not you will qualify now. If you don’t, let’s work on it.
- Make sure you are doing everything in your power to help yourself. Pay the bills on time (or at least < 30 days late), keep your balances low, don’t quit your job, etc.
- Most importantly, work with me. Together, we can make it happen!
Here is why we need to start now!
- Mortgage rates could rise, not fall. The banks got a HUGE infusion of our tax dollars, but have you seen them loaning it out??? They are being very cautious. The Fed may lower rates, but they don’t control what the lenders charge.
- Your home’s value could drop. A nearby foreclosure or natural disaster could hurt the value and without enough equity, refinancing could be difficult, if not impossible.
- Your credit could take a hit. Missing one payment and getting a 30 day late on your credit report could ruin your ability to get a new loan. Even if you have less-than-perfect credit now, we can help.
- Lending guidelines may change. In fact, there are new guidelines in place today, January 1, 2009, that negatively impact a lot of borrowers.
- You could get injured or even lose your job. The top three reasons for foreclosure include loss of job, divorce and death / injury of the primary income source. Lenders lend on the ability to repay, not the asset. You may have $250,000 equity in your home, but without showing income to make the monthly payments (before you get the equity out), you may not get the loan.
- Mortgage insurance rates could rise. What’s more, for borrowers who do not qualify for FHA financing (investors for instance), not only will increased MI costs hurt the pocketbook, but the loan-to-value that the insurance companies will lend to will decrease. Are you able to put 15-25% down in cash? Investors and holders of jumbo mortgages (currently > $417,000) may fall into this trap.
- Your house could sustain damage. Here in NW Indiana, we have seen flooding in several areas over the past several years. Damaged homes do not get new loans! Also, even if your home is not damaged, it could cause the closing to be held up just by being declared in a “disaster area”.
Although a topic for another day, a cash-out refinance could be a life (and home) saver during difficult times. Taking out cash and investing it for safety, liquidity and a greater rate of return than your mortgage interest rate, can help if you should find yourself in one of the above situations.
Are you ready to get started now? If so, give me a call at 219-695-0369 and let’s see what we can do.
Still sitting on the proverbial fence? Give me a call at 219-695-0369 and we can discuss your concerns. If you are trying to “time the market”, you could very well get burned.
Scott, your Trusted Advisor
Your first and last stop for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and Indiana VA loans.


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