Mortgage rates fluctuate from day to day and hour to hour. The only thing you can be sure of is that eventually the current low rates are going to start to climb again. As recently as the 1980s, a buyer was lucky to find a mortgage loan for as low as 10%. Most were considerably higher. It's not beyond the stretch of our imagination to consider the fact that that could well happen again if our economy starts to boom. Although home sales are still in a slump due to the fact that there have been too many foreclosures and not enough people with the financial security to buy, if you are in a position to purchase a new home now, you can take advantage of a win-win situation.
As you have probably heard, with the mounting number of foreclosures, property values have dropped dramatically. A property that sold for $250,000 during the housing boom might be purchased in some areas now for half that value. You may have never considered owning a house costing a quarter of a million dollars, but now may be your chance. By purchasing a home that will eventually be worth twice as much as you paid for it and taking advantage of the lower interest rates, you stand to both make and save big money. The time is right for qualified buyers.
Mortgage loans are harder to get right now, because lending institutions are adhering to stricter lending policies. During the previous decades, they became complacent and loaned money to people who really didn't have the money to pay it back. They went with concepts such as variable rates which eventually would turn into high-interest fixed rates or balloon payments. Buyers were convinced that by the time these changes took place, their earnings would rise enough to keep up with the payments. Unfortunately, this optimism was misplaced. Thousands of people who were faced with higher mortgage payments were also confronted with unemployment and under employment, and the money to pay the higher payments just wasn't there.
Lenders do not want people to default on houses. They are in the business to make money off of the interest you pay, not to sell repossessed homes. Therefore, after learning the hard way about what hard times could do to their bottom lines, they tightened up their guidelines. Still, if you can meet them, you stand to get the best deal of your life.
As you have probably heard, with the mounting number of foreclosures, property values have dropped dramatically. A property that sold for $250,000 during the housing boom might be purchased in some areas now for half that value. You may have never considered owning a house costing a quarter of a million dollars, but now may be your chance. By purchasing a home that will eventually be worth twice as much as you paid for it and taking advantage of the lower interest rates, you stand to both make and save big money. The time is right for qualified buyers.
Mortgage loans are harder to get right now, because lending institutions are adhering to stricter lending policies. During the previous decades, they became complacent and loaned money to people who really didn't have the money to pay it back. They went with concepts such as variable rates which eventually would turn into high-interest fixed rates or balloon payments. Buyers were convinced that by the time these changes took place, their earnings would rise enough to keep up with the payments. Unfortunately, this optimism was misplaced. Thousands of people who were faced with higher mortgage payments were also confronted with unemployment and under employment, and the money to pay the higher payments just wasn't there.
Lenders do not want people to default on houses. They are in the business to make money off of the interest you pay, not to sell repossessed homes. Therefore, after learning the hard way about what hard times could do to their bottom lines, they tightened up their guidelines. Still, if you can meet them, you stand to get the best deal of your life.