Mortgage Rates Still at All-time Low Levels

Mortgage rates have hovered slightly below 5% for several months now. Several people I know have inquired about whether refinancing is right for them. There is a short article on BankRate.com which lists 6 questions to ask yourself as a starting point for determining whether refinancing is in the cards for you.

1) Do I have equity in my home?

You may or may not know the answer to this question off the top of your head. Often it will depend on when you bought your house and how your local market has performed during the recent real estate slowdown. You can ask your local Realtor for a Comparative Market Analysis (CMA). This is not an appraisal but will give you a good idea of your current home valuation.

2) What is your credit score?

Quick and dirty go on one of the recognized sites for credit scores: Experian, Equifax, FICO. Asking for a credit score WILL NOT hurt your credit rating; applying for credit affects your score.

3) What are your financial goals?

This is very personal: are you trying to pay off your mortgage ahead of retirement? Get money out to pay for college?  With rates this low, borrowers can sometimes maintain the same monthly payment while reducing the term of the loan.

4) How long do you plan on staying in your house to make it worthwhile to pay for the refinancing?

Bankrate has a calculator so you can calculate the payback period.

5) What are your current loan terms?

Borrowers who have an adjustable rate loan should seriously consider switching to a low fixed rate at this time. The specter of inflation is out there and there is no guarantee the Fed can keep rates low over the long term.

6) Do you have a second mortgage or line of credit?

When refinancing, any secondary mortgages will have to be paid off or combined into a larger primary mortgage loan.

Mortgages for Westchester Home Purchases

Wow! The Wall Street Journal is reporting that mortgage rates are at their lowest level in 50 years! According to the author, Nick Timiraos, "Freddie Mac also said on Thursday that rates this week had fallen to an average 4.69%, which is the lowest level recorded since it began its survey in 1971. Brokers were quoting rates as low as 4.25% on 30-year loans on Thursday for well-qualified borrowers."

Demand Low for Home Purchase Mortgages

Yet, according to the article, demand for new mortgage financing has not been at the level that would have been expected with such low rates. Why would this be? Could it be that consumer confidence and job security play a greater role in the decision to purchase real estate? Of course The Wall Street Journal is looking at the real estate market nationwide. As I mentioned in the mid-month review of Westchester real estate activity in the Along the Sound market, sales have been good, especially for the month of June. We will review the details of the Along the Sound market for Westchester real estate sales for the month of June and the first half of 2010 by the end of the week. There will be positive news for this segment of the Westchester real estate market.

Bankrate.com has reported that mortgage rates have remained at historically low levels for the second week in a row. This is good news for the well-qualified buyer as conforming loans in New York are averaging slightly less than 5%. Check out this chart on Bankrate and see the loans available at area lenders.

Reports are that many homeowners are taking advantage of the low interest rates and refinancing their existing homes rather than purchasing a new home.  It's possible that the 2008 economic meltdown has made homeowners leery of overextending themselves in the real estate market. This is a good thing!

The Federal Reserve held short-term rates steady as they had previously indicated they would. The federal funds rate has been held at 0%. This is the rate that banks pay on overnight loans to one another. it will also influence the prime rate. Although there is no direct correlation to mortgage rates, the low rates are meant to encourage banks to lend their money to consumers so that they will purchase other goods such as houses, cars and appliances to help the economic recovery. Mortgage rates are roughly steady in the Westchester area; about 5.30% for a 30-year conforming loan.

According to the Wall Street Journal, mortgage rates hit 8-month high. Average mortgage rates are now at 5.21% for a 30-year conforming fixed loan. (4/9/10)

The spring market seems strong with good weather bringing out buyers and multiple bids in certain neighborhoods.