Dave, I'm not sure I understand your comment?
Mark, In the past everyone--borrowers and lenders--expected home prices to keep rising, making the risk of loose lending requirements okay. Not anymore.
So right. It's gone the other way, to some extent.
While we're on the topic of lending requirements, do you have any tips for first-time buyers when it comes to preparing to buy a home?
Buyers need to have all their ducks in a row. And be pre-approved for a mortgage.
How good does your credit score have to be?
Janet, you don't have to have a pristine credit record. Lenders like to see 740 for the best rate, but if it's lower, you can still get a loan.
Janet, to snag the best interest rates on a mortgage, you need a credit score of 740 or more. You can get in with less, but you'll have to pay a higher rate.
There have been so many articles out there about how the younger generation's move-back-home lifestyle is "killing" the housing market.
There are so many reasons, and that's probably one of them.
Dave, Good point. I like looking at the Web sites of local multiple-listing services or real estate brokerages for the latest information and leads to selling agents.
Another thing that's killing the housing market is the number of foreclosures.
K, as the economy improves and young people feel they can afford to move out, that will change.
Bye, Dave. Let me hit foreclsoures first.
But foreclosures are also good news for first-time buyers because it has lowered prices.
Yes, the rate of foreclosures coming to market has been hastening, mostly ones that were held up by the foreclosure-processing moratoriums.
Let's move on to our next question from Vince.
Now that the moratoriums have ended, foreclosures are coming to market again. They tend to depress home prices.
To see if it's worth it to refinance, first determine how long you will stay in the home.
Hi, Vince, It depends on how long you expect to be in the home. If you'll be there long enough to recoup your closing costs, it may be worth it to lock in a lower rate.
Then see how much you can lower your monthly payment.
Two years or less, it's probably a no-brainer.
The national average mortgage rate recently has been under 4%. Wow!
But closing costs, as Pat says, are the deciding factor.
Just hit a new record low of 3.83% yesterday.
That is for a 30 year fixed rate.
One tip on refinancing: you can reduce your closing costs by getting a discount on lender's title insurance when you refi. Be sure to ask about that.
Mark, yes, 30-year fixed. Of course, rates on adjustable-rate mortgages are lower still.
Wow! A perfect intro to our next question from Barb.
Ah, 15-year fixed mortgages are averaging 3.05%
Yes, even with the lower rate on a 15-year mortgage, you could be locking into a somewhat higher monthly payment. You have to decide whether you want to commit to the higher payment.
You will pay less interest overall on a 15-year mortgage
Barb, you need to see what the difference will be in the payments with the 15-year rate and see if you can handle it.
Also, if you are saving for retirement, you might want more cash freed up for that, and get the 30 year
Mark, Good point. (Or buying furniture for the new home!)
Barb, what other needs do you have for the extra money--saving for college, for example? Or do you want your loan paid off before retirement? You need to factor in your other goals.
Some people hate the thought of paying on a mortgage forever. It can be an emotional decision, too.
All good considerations before applying for a mortgage.