CommonWealth Real Estate Your Way, Brodheadsville
Pocono and Lehigh Valley Real Estate Blog

It is time to get off the fence, Really it is..

 

October 8, 2010

By HOWARD FRANK

Pocono Record Writer

October 08, 2010

Mortgage rates just hit a 40-year low, and that may be music to the ears of both homeowners and the local housing market.

Even if you just refinanced, rates on 30-year and 15-year mortgages fell to their lowest points in decades.

The average rate on 15-year fixed loans fell to 3.72 percent from 3.75 percent. That was lowest on record dating back to 1991.

“That means for those looking to purchase or to construct a new home, mortgage money just became even more affordable,” said Bob Howes, senior vice president of lending services for ESSA Bank and Trust.

Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans dropped to 4.27 percent, the lowest on record dating back to 1971. That’s down from 4.32 percent the previous week.

The rates provide opportunities even for those who recently refinanced.

“If someone has already (refinanced) a year or two ago with a rate in the 6′s, it’s still time to look at it again,” said Teresa Anthony Yocum, business development and commercial loan officer with Community Bank & Trust. “It’s a great time to buy. It’s definitely a buyer’s market.”

Low-cost money, along with a decline in home values from its peak in 2007, means there’s tremendous opportunity, according to Howes. Those with loans can refinance to lower their monthly payments or shorten the length of their loans.

“Where they are really going to get ahead is if they could cut the term,” Yocum said. “Their payment might be the same as what they are paying now, but they can cut 10 years off the payment of their loan, saving tens of thousands of dollars of interest.”

Vickie Brockelman, owner of Commonwealth Real Estate Your Way, said the rates have to affect the local housing market positively.

“For the first-time home buyer, with the interest rates the way they are, I can’t imagine they can’t help but get into the market at rates lower than they can rent,” Brockelman said.

It’s also an opportunity for someone who bought during the housing bubble of high home prices to catch up. She advises they set their selling price lower and let the current market work for them. “You’ll be buying in today’s market and at today’s interest rates,” she said.

The low rates can even help distressed borrowers.

“It’s an opportunity for sellers under water to get their houses out there competitively and avoid foreclosure,” Brockelman said.

Refinancing usually involves bank fees and title insurance, which make the refinance decision more complicated. Howes said ESSA may waive the title insurance for borrowers choosing a 20-year term or less, and a loan amount of $200,000 or less.

When is it time to refinance? There are on-line calculators like the one on ESSA’s website. Yokum advises borrowers to call their local bank and talk to a loan officer, who can help determine whether it’s worth refinancing.

But wait for lower rates at your own peril.

“Nobody knows where the bottom is,” Howes said. “This may be the bottom. If you delay, you might miss enjoying the lower payment now, in the hope that rates might go lower.”

Commonwealth Real Estate Your Way, LLC..... RB# 066860..... Office: 570-972-0155


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