Financing in 32225>Question Details

Terra, Home Buyer in Jacksonville, FL

When would be the best time to buy a house with regard to mortgage rates?Are they predicted to inc or dec?

Asked by Terra, Jacksonville, FL Tue Mar 11, 2008

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Terra,
The first question is more up to you finding the home. If you feel you are getting the right deal on the home than it is a great time. If you feel it is not a good deal than keep on looing. The market is the market and there are sellers out there that are motivated and many that are not. Cindy made a great point that builders are still ginving some of the best deals out there today, but there are others to be found. Finding the right home at the value you want should help you make the decision if this is your best time to buy. The biggest thing is are you ready, willing and able to make the decision. If any of the 3 are no than start looking later.

In reference to your second question, yes. The market has been up and down and seems over the last couple of weeks rates have been moving back and forth.

When looking to obtain a mortgage you should consider a few things, including whether rate or payment is the most important factor. Unfortunately you can't have it all and one will have to dominate.

Look at your overall situation and make the best informed decision. In many cases yes you can bring the rate down by paying points but make sure that is in your best interest. This can be determined by the length of time you plan to live in the home. How much money you want to put down for closing costs and so forth.

If you have any questions you can contact me and will be happy to assist with you reaching your objectives.

Good fortune!
2 votes Thank Flag Link Mon Jun 9, 2008
Terra

Most of the professionals agree that now is a good time to purchase. Many seller's are very motivated to sell and are accepting price and terms that are very favorable to buyers.

Waiting on a lower interest rate may not result in a lower payment.

The P& I mortgage payment on a $200,000 mortgage at 6% is $ 1199.10.
If rates should decrease to 5.75% the payment would be $1167.15 a savings of 31.95 a month

If while you are waiting on the rates to drop, home price increase 3% to $206,000
an the interest rate drops to 5.75% your payment will be $1202.16

In this scenario you did not save anything and took the risk of interest rates and home prices increasing. The moral here is if you feel comfortable with the payment don't sweat the "what if".

Rates usually do not change drastically. They usually move in 1/8% increments and paying a discount point or two as part of the closing cost can get you a lower rate.

If getting a lower interest rate is important to you, a saavy Buyer's Agent can negotiate a rate buy down as part of the seller's concession. ( The seller agrees to pay 2 or 3 discount points to get a lower interest rate for the buyer) However, you will need to do the math. 3 discount points is $6,000 on a $200,000 home. Which is better in the end. The lower interest rate or buying the home for $194,000.

Don't put too much emphasis on interest rates. A good Buyer's Agent can negotiate price and terms to your advantage.

Contact a Mortgage Broker and discuss interest rates and types of mortgages the contact a Buyer's Agent to work closlely with you and your lender.

If I can be of assistance please contact me. I, along with the other Realtors who have replied to your question, would welcome the opportunity to earn your business.
Web Reference: http://www.cathysloan.com
1 vote Thank Flag Link Fri Jun 13, 2008
Hi Terra, Rates are still historically low, and now is a great time to buy! I don't think anyone really has a crystal ball that can give a clear answer on your question. My advise is to really look at buying now. There are many great deals on resales and great deals on new construction. This "buyer's" market will not last forever! If I can be of assistance with anything else, please contact me at cindygavin@vanguardgmac.com or call 904-465-3397. You can search the MLS on my website at http://www.cindygavinhomes.com Sincerely, Cindy Gavin, Broker-Associate, Realtor Vanguard GMAC Real Estate
1 vote Thank Flag Link Tue Mar 11, 2008
Of course you always want to buy when the rates are at their lowest, but that is not always where you get the most savings. Prices for homes are low but are turning around, your credit score may or may not get you the best rate. Whether or not there is going to be an increase or decrease in the near future
would be a hard call.
0 votes Thank Flag Link Wed May 16, 2012
Now is the best time to buy. Rates have never been lower. Rates are not even a issue in this market. You get the best of both worlds Low Prices and Low Rates. Take advantage of this great time in your life.
0 votes Thank Flag Link Wed Jul 15, 2009
Dear Terra,
The interest rate is just one factor in determining when is the best time to buy.

If you are a first time home buyer, then if you close on your home purchase by Nov 30, 2009 you could get up to $8000 in a tax credit and also qualify for the FHOP of up to $8000.00 to use toward your down payment. That could be an extra $16000 that does not come out of your pocket and that you do not have to pay interest on so the rate would be irrelevant.

If you qualify for H2H, FL assist, FHLBA, and FHOP as a first time home buyer, you could be looking at up to $32999 in down payment assistance that you do not have to pay interest on. These programs can expire or run out funds, so the sooner you utilize them the better off you will be in the long run.

If you are not a first time home buyer you may qualify for the new NSP program. 487 homes will be purchased in the next 18 months by 16 developers in 5 certain zip codes in Jacksonville. If you are buying in one of those zip codes, then now is the time to make an offer to the developer on a foreclosed/REO home to be renovated. It will take a minimum of 4 months before you can close once the developer accepts your offer.

There are currently over 10 months of inventory on the market for sale which means you have more homes than normal to select from (buyers market). If you wait until there are only 6 months of inventory on the market then you will probably be in a sellers market and your dollar will buy less home.

Conditions that are personal to your financial picture also determine when is the best time to buy.

For most buyers, now is probably the best time to buy. Don't wait until you are under pressure because you have to buy within a certain time frame. If you select a short sale it could take over 6 months before you can close on your purchase. If you select a NSP home it could take 4-6 months to close. If you are paying cash and not requiring any inspections you can probably close in 2 weeks if the title clears.

There are a lot more factors to consider than just the interest rate. When I first obtained my real estate license in 1984 interest rates on homes were 11.25% - 18% on a mortgage. Now they range from 4% - 6.5%, which I think is fantastic. I was selling a lot more homes when interest rates were 9%.

You are fortunate to be considering a home purchase in the present marketing environment. Take advantage of it or you will regret it later. Remember, most millionaires have a large percentage of real estate holdings. Normally, real estate property values increase by 4-7% a year. That's like someone adding money to your savings every year because of the increase in equity. You hear a lot about people being underwater on their mortgages but remember that is mostly the ones that bought when property values were at their highest and it was a sellers market.

Brenda Gravitt CRS, GRI
Coral Shores Realty
bkgravitt@gmail.com
904-573-9638
0 votes Thank Flag Link Wed Jul 15, 2009
Terra

Zack had a great answer and I agree with him wholeheartedly, despite the fact that I'm a realtor as well. I am a realtor and a mortgage lender. I can tell you rates are and will contiue to be on an upswing. The reasons, inflation is out of hand, monetary policy has to tighten, plus more money will need to be borrowed to support our dual wars, no matter who is elected.

Opposedly, as rates rise so does your barganing and negotiation power. You however must find a balance between the two. Currently, based upon facts not sales wishes, now represents an excellent opportunity to purchase real estate with a long term outloook. If your time frame is greater than five years then you really can't lose right now as income values continue to rise. If your time frame is for a short term flip, it's possible to that flip won't occur in any less time period of one year, and I hope you have negotiated a good deal as you can expect prices to continue to slip.
0 votes Thank Flag Link Wed Jul 9, 2008
Terra,
When you come to a site mostly populated by people that make a living assisting people buying and selling houses, what type of answer do you expect to your question? You'll get a lot of answers probably containing "Crystal Ball" which makes me think there is a NAR class somewhere that mentions if someone cites data predicting future trends, break out the crystal ball analogy to make them seem ridiculous. Maybe next year it will be tarot cards.

Anyway... as for the fed funds rate, the rhetoric from the fed and the markets are betting on no change in the june meeting and a 1/4 pt raise in rates in the august meeting. But the fed funds rate change does not mean a direct change in mortgage rates. The two are highly correlated, as the fed funds rate affect short term yields which affects 10-year yields which is what mortgage rates are tied to. But in the past year and change, the fed funds rates has been cut from 5.25% to 2%, during that time, mortgage rates have actually increased. Right now the spread between the 10 year treasury yield and mortgage rates is the highest its ever been. So an increase in rates only means the fed is now trying to hold off inflation and when banks get a better handle on who is credit worthy and who is not, the spread between the 10-year treasury yield and mortgage rates will close. All this means that regardless of what the fed does, its likely that rates stay about where they are for a while. Right now, in most of the country, home prices are still falling and inventory is increasing. So even if rates go up some, if the price falls, you'll do fine, and you can always refinance rates, you can never change your purchase price.

Zack
0 votes Thank Flag Link Fri Jun 13, 2008
Terra,
We also feel this is a great time to make a decision to buy. Our recommendation is to identify and agent to work with you and get started with trying to locate a home that meets your criteria. If you can obtain it at your "ideal " price, that's the time you need to make the decision if it's the right time for you.

Many buyers today are taking advantage of the truly motivated sellers by negotiating prices that provide a cushion, should the market continue to decline, of 10, 15, 20% below the asking price.

There are two options......you can wait for the market to get to where you feel it needs to be for you to buy or you can create your own bottom line price that you are comfortable with. We like the latter.

Good luck,
The "Eckler Team"
0 votes Thank Flag Link Fri Jun 13, 2008
Terra
Patti has already given you some great advice. Interest rates have gone up slightly, but they are still very good. However, Interest rate fluctuate daily.
One thing you do need to consider is the price of homes. It's definitely a buyers market and there are some great deals to be had. If you are considering purchasing a home, it's a great time. No one can predict how long prices will be this low. However, market trends are showing that the home purchase numbers are beginning to increase.
If you would like to view properties that are valuable in Jacksonville, Check out my website @ http://www.prudentialnetworkrealty.com/agent.aspx?id=34733
This will give you an idea of what is available in the market.
If you have any questions give me a call or email me.

Shonda Sauls, REALTOR®
Prudential Network Realty
(904)260-4300 #625
Shonda.Sauls@PrudentialNetworkRealty.com
0 votes Thank Flag Link Wed Jun 11, 2008
The general thought (which could be wrong, of course) is that interest rates are about as low as they'll go. There are some indications that inflation may be returning, so the supposition is that the Fed won't lower rates any more. Unfortunately, it appears that the Fed may be in the same position it was in during the 1970s with "stagflation"--a stagnant economy (in which cutting interest rates would be the right move) coupled with inflation (in which raising interest rates would be the right move).

Remember, though, that interest rates are only one component of a house's affordability. The other is price. So (though I don't think it's likely), even if I thought interest rates would go lower, but house prices would rise, now might be a better time to buy than waiting for the lower rates but higher prices. Many of the agents here seem to see a variation of that scenario (rising house prices coupled with climbing interest rates) suggestion that now's the perfect time to buy.

I personally am not that enthusiastic. Interest rates may rise slightly, but not radically. Meanwhile, prices in some markets are still declining. So, what looks like a good price today may not appear so tomorrow.

So, look at both elements of the equation: mortgage rates and prices. Those two, together, will help you determine the "best time" to buy a house.

Hope that helps.
0 votes Thank Flag Link Mon Jun 9, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
Contact
Dear Terra:
If we only knew we would all be very, very, rich. There is no right or wrong time to buy. The rates are great today the prices are great today, and if you are ready, the time is right today. The key is that you need to be ready, not just financially but mentally, too. So ask yourself that ? & if the answer is yes - then go for it! Good luck.
0 votes Thank Flag Link Tue Mar 11, 2008
Hello Terra! Absolutely, now is a great time to buy. The interest rates have moved up slightly and are not really predicted to make a huge jump back downward. I am advising my homebuyers who are not able to make large downpayments and who have average credit scores to figure an average of 7.25% as the interest rate. This is a very conservative estimate (although not totally out of line) and hopefully the rate will be less when financing is secured (anywhere from 6.8 to 7.25 considering amount of down payment, credit score of buyers, etc.). The higher the downpayment and higher the credit score, the lower the interest rate. If you are considering making a move, now is the time. It's impossible to time the market and our market is predicted to improve as we move further into this year. I'm available seven days a week via my cell phone - 904-742-8451. Call me and I'll set up a personalized homefinder program for you and answer any other questions you may have about financing or the home buying process. Thank you for this opportunity to be of assistance. Best Regards, Patti Namey, GRI, Broker Associate - Watson Realty Corp. http://www.PattiNamey.com 904-742-8451
0 votes Thank Flag Link Tue Mar 11, 2008
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