Friday, August 19, 2011

How to benefit from lower mortgage rates

  Wow.  The last 2 weeks have been crazy!  A tremendous number of inquiries and lots of people taking advantage of the lower rates.  I have seen banks below 4% for the first time in my 10 years in the business and from all indications, these are the lowest rates in history.

  Anyone who has a mortgage rate of 5%, regardless of the type of loan it is, has the ability to save money on a monthly basis.  But its crucial to make try and check every aspect of your deal before submitting your file to the bank.  Here are some things that you must think about prior to submission:

1.  Type of property- If its a single family home, then its simple.  If its a co op or a condo, make sure the building is checked.  Just because the bank did a loan in the building 2 months ago, does not mean the building is still approved.

2.  Income, assets and credit-  Everyone should know this one.  Make sure you meet the credit and debt ratio requirements of the bank.

3.  Home value- With values continuing to fall, you must be careful and try to assess the value as best you can prior to the appraisal.  Federal law no longer allows the appraisal to be ordered before you submit your file to the bank.  A law that I believe has hurt the real estate market.  Too many people have spent money on an appraisal only to find out the value isnt there and the refinance dies.

  If you are thinking about refinancing, now is the time to do it because short of a tax cut, there is no better way to put money in your pocket.  Just make sure you have done your homework with an experienced loan officer before moving forward.

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