Waiting for the rates to drop? Avoid this costly mistake.

Interest rates have been at historic lows for months. This is because the Fed has been buying Mortgage Backed Securities to fight off inflation and they will continue to do this as needed. The problem with this is that the Fed is buying 5.0% to 5.5% Bonds and the mortgage rates of these outstanding home loans are 6.0% to 6.5%. The loans that the Fed is buying are good loans that are likely to be paid back. Bonds and home loan rates have weakened and lost some ground in recent weeks.

I believe that if you have been sitting on the fence waiting to purchase or refinance, now is the time. Yes, another 1/4 of a point could save you $60/month, but think of it this way. If you refinance or purchase now, the savings that you will have over waiting another month or two could well be worth acting now verses waiting and taking the chance that the rates will indeed start to reverse and go upward, costing more money.

Today, the homeowner with a $220,000 mortgage could buy a larger or newer home with only a slight increase in payment, or refinance and save hundreds of dollars off their current mortgage payment whereas waiting until the summer, thinking the rates could keep falling, could end up costing hundreds of dollars.

Also, another thing to keep in memory is that the credit score needed to qualify for these great rates keeps going up making it harder for some buyers to qualify for a loan to get that bigger house.

Bottom line is NOW is the time to make that decision to buy or refinance that home. If you are selling to move up. think about making your asking price more attractive. Then you can get out sooner and a potential buyer will also be able to get into a house that they believe is a good deal.