Are people encouraging their clients to take advantage of the current interest rates where they are?

Asked by Aly and Justin Tesar, Winnetka, IL Fri Jan 17, 2014

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Lydia DeLeo, Agent, Wilmette, IL
Tue Jun 24, 2014
Absolutely take advantage of the low interest rate climate we're in because it will not last! Especially jumbo rates which in many cases are rivaling conventional which is an anomaly. Also keep in mind with every 100 basis points rates increase (1%) a buyer's purchasing power decreases by 11% which is significant....so to all those considering buying, now is the time...and to those sellers that have been sitting on the fence waiting for home values to go up even more....you may want to rethink your strategy because once interest rates go up buyers won't be able to afford as much home so CARPE DIEM!
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Robert Hanson, Mortgage Broker Or Lender, Olney, MD
Wed Jan 22, 2014
For me and my clients the answer to this depends on the specific client. Rates are still good, but whether one should take advantage of them depends on a variety of financial and personal specifics. A full, appropriate analysis of this requires much more detail and information than could (or should) be posted in a forum such as this.

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Jeff Baker, Mortgage Broker Or Lender, Chicago, IL
Tue Jan 21, 2014
As a mortgage lender, the easy answer would be to say "Buy your home now, before you lose out on these record low rates!" But of course there have also been many times in the last 13 years that people have heard that rates can't go any lower, and yet other than the last 6-8 months, they have been in a pretty regular decline.

The biggest difference in the last few years is that low rates have combined with moderating/falling home prices to improve affordability for most buyers.

My advice is not to play into the fear of missing the bottom of the market, because you may look like a fool when those predictions turn out to be incorrect. But I would certainly encourage buyers to move quickly on opportunities that are within their affordability range, especially now that home prices have started to rise again. For 95% of typical home buyers, timing their purchase based on interest rate or home price cycles is senseless (if not impossible except for the luckiest among us). The more important objective is to find a suitable home with a payment that fits overall financial picture so they're not second guessing themselves 6, 12 or 36 months down the road. Happy customers make the best referral sources!
0 votes
Mack McCoy, Agent, Seattle, WA
Fri Jan 17, 2014
Yes, they are.

Personally, I would rather buy something today with 4.5% money instead of hoping that prices might come down by 10% when interest rates are at 6% or higher.
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