Understanding Your Local Real Estate Market
It's important
to study your local real estate market before you seriously look at houses
so that you can make educated decisions through out the process. As your
agent, I can get you a report of sold comparables and we can look at what
current listings are being priced at to reveal the mindset of sellers in
your market. Start browsing the real estate market in your town now, before
you talk to a real estate agent or for sale by owner seller.
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Browse listings on the my website of the entire
MLS market |
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Pick up real estate for sale books in your area.
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Read real estate ads in the local newspapers.
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Take adventure drives and look for For Sale
signs. Note which neighborhoods you like the best. |
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Make changes to your Wants & Needs list if
necessary. |
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The Cost of Your Mortgage Loan
Locking-in the Rate
When shopping for a mortgage, the lender may give you a quote for the
mortgage interest rate and points (additional fees charged by the lender
usually paid at closing by the borrower). These only represent terms
available at the time of the quote. They may not be available by the closing
date (which may be weeks or months in the future). To ensure the rate and
points are the same at closing as they are when quoted, you'll need to
lock-in the interest rate (also known as a rate lock or rate commitment).
Obtain a Written
Agreement
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floating the Rate
Buyers opt to float the loan when they
believe interest rates will drop after their loan application date
and prior to closing. The risk is that rather than dropping,
interest rates rise, increasing the mortgage payment. |
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Most lenders will commit,
in writing, to a mortgage interest rate for a specified time period while
your loan application is processed - this is known as "locking-in" the rate.
If you elect to lock-in an
interest rate, it is best to deal with a lender who provides a written
lock-in agreement. Be sure to read this agreement carefully, some lock-in
agreements become void due to actions beyond your control - such as a change
in the maximum rate for VA-guaranteed loans.
Lock-in Options
The following lock-in
options are common among lending institutions. Be sure to ask the mortgage
lenders you are considering which lock-in options they offer.
·
Lock-in interest rates and
points.
This will give you a clear
understanding of how much your mortgage will cost. Neither your interest
rate nor points increase during the lock-in period. This protects you
against rising market conditions.
·
Lock-in interest rates and
floating points.
Your interest rate is locked-in and will not change for the lock-in period,
while your points may rise and fall with market conditions. With this
option, your lender may allow you to lock-in the points at the current
market condition some time between submitting the loan application and
closing.
·
Floating interest rates and
floating points.
This gives you the option to lock-in the interest rate at some time between
submitting the loan application and closing. This puts you at risk if
interest rates and points rise and may not be best for a homebuyer with a
tight budget.
The Cost of Locking-in
the Rate
It is not unusual for a
lender to charge a fee for locking-in an interest rate and points. This fee
may vary depending on the amount of time you want to lock-in the rate (the
lock-in period).
The fee may be charged when
you lock-in the rate (and is rarely refundable if you withdraw your
application, if your credit is denied or if you do not close on the loan) or
it may be included in your closing costs. The amount of the fee and when it
is charged will vary among lenders.
The Lock-in Period
Most lenders will offer
lock-in periods of 30-60 days. Some lenders may only have short lock-in
periods. And still others may offer a longer lock-in period (expect higher
fees for longer lock-in periods).
The lock-in period should
be long enough for the loan approval process and to allow for any other
contingencies that may delay closing.
The Lock-in Expiration
Date
If unexpected circumstances
prevent the loan from settling prior to the last day of the lock-in period
(whether caused by you or others in the process - including the lender), you
lose the interest rate and points that were locked. Prevailing interest
rates and points are usually charged under these circumstances. Be sure
to ask your lender before you lock-in what interest rates and points
will be charged if the loan is not closed before the lock-in period expires.
INTEREST RATES
The Federal Reserve decided to hold interest rates steady last month,
in part due to heightened concern over the housing sector. Many
economists predict that the Fed's next move will be a rate
cut later in 2007.
MORTGAGES
Thousands of homeowners are growing uncomfortable with the
rising rates on their adjustable mortgages and switching to the fixed-rate
variety, according to mortgage experts. The advantage is that they lock
in an interest rate -- and a monthly payment -- so that budgeting
becomes more predictable.
Current Mortgage Rates- Chicago Tribune
Rates on 30-year mortgages edged down this
week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate
mortgages fell to 6.30 percent, down slightly from 6.31 percent last week.
It put rates at the lowest level since they were at 6.24 percent the first week of
March. Rates have been headed lower for more than two months as financial markets
have become convinced that a slowing economy will help ease inflation pressures
and that we keep the Federal Reserve from raising interest rates further.
The drop in mortgages has spurred a rebound in mortgage applications, driven
impart by homeowners with adjustable rate mortgages who want to refinance to a
fixed rate before their current mortgages reset to a higher monthly payment."
Home refinancing rose 18 percent last week, accounting for almost half of all
mortgage applications," said Frank Nothaft, chief economist at Freddie Mac. Rates on 15-year, fixed-rat mortgages, a popular choice for refinancing,
averaged 5.98 percent last week, the same as the previous week. that is the
lowest ate for this type of mortgage since March 23. Rates on one-year adjustable rate mortgages dipped to 5.46 percent, down from
5.47 percent last week.
Rates on five-year adjustable-rate mortgages were unchanged at 6.00 percent. The mortgage rates do not include add-on fees known as points. For a
30-year mortgage, the nationwide average fee was 0.3 point while the 15-year
mortgage carried a fee of 0.4 point. The one-year ARM has a nationwide average
fee of 0.7 point and the five-year ARM carried a fee of 0.5 point. A year ago-30year mortgages averaged 5.98 percent, 15 year mortgages stood at
5.54 percent, one-year ARMs were at 4.77 percent and the five-year ARMs ere at
.48 percent.
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