Mortgage rates continue to go lower.
According to Key Savings Bank a 30 year fixed rate mortgage is down to 4.275%.
How does a lower interest rate translate into more buying power for you?
$100,000 mortgage at 4.275% = $493.40 payment
$100,000 mortgage at 5.275% = $553.75 payment
Not only does a lower interest rate mean a lower payment, but it also means an increase in your buying power. Purchasing a new home with a 4.275% rate allows you to purchase a home for $112,000 for the same payment as a $100,000 home with a 5.275% rate.
INCREASING your buying power by 11%!
No matter what your goal, a low rate means only good things for you.
The question that everyone wants to know is: What’s the next move for interest rates? Higher or lower?
The answer is–we don’t know. What we do know is rates will go up faster than they fall.
Its been more than half a century since mortgage rates have been this low.
The average rate for a fixed 30-year mortgage shrunk to 4.69% last week.
If you have the Big 3:
- Job Security
- High Credit Score and
- Cash
You can qualify and secure a loan that will save you thousands of dollars over the entire term of the loan.
Did you know that a 1% decrease in a mortgage rate can increase your purchase power by 10%? So for a loan of $100,000 you can increase your purchase price by $10,000…for a $200,000 loan you can increase your maximum price by $20,000…all for the same monthly payment as your neighbor with the less expensive home than yours.
Along with a lower interest rate remember that home prices have been stagnent the past few years too. Leaving you with the ability to purchase a “better” home for the same amount of money as you would have in 2007.
Starting the buying process is as easy as contacting your favorite Wisconsin Rapids Realtor and meeting with a lender to get pre-approved and lock in this especially low interest rate.
As you know the interest you pay on your mortgage is tax-deductable.
Which means that if you’re able to pay your January 2010 mortgage payment before the end of December you’ll be able to increase your 2009 tax deductions. And that’s always a good thing.
Paula Henry who sells Indianapolis real estate wrote a timely post reminding everyone of this.
She also states that:
This time of year, it’s easier for some to postpone their mortgage payment until after the holidays. By paying in 2009, the mortgage interest paid can be applied against 2009’s itemized tax deductions even though the payment isn’t technically due until 2010.
In the end you’re paying it anyway… I know the holidays make it difficult. Plus, property taxes are due. In my case, I’m not escrowing enough per month; so I have an extra $400 I need to come up with in the next couple of weeks…
But, if you’re able, by pre-paying you’re guaranteeing that the tax-man will leave a little more in your stocking come April 15, 2010.
Photo Credit
Today’s mortgage rates–averaging just over 5.0% for a 30-year fixed loan–are steals. Experts agree that loans will hover in the 4.75% to 5.5% range all year. This bodes well for anyone choosing to buy a Wisconsin Rapids home this year.
As you begin to research mortgage information take note of the following four tips:
- Some lenders are requiring more information. This can cause banks to take longer to approve your loan. Make sure you know how long each bank will need to approve your loan. My suggestion: start your loan search early in your home buying process…
- To land the best rates you’ll usually need at least 20% down and a credit score of 720 or better. Remember, you get one free credit report per year from each of the big three (TransUnion, Experian, and Equifax).
- To qualify for a mortgage, your total debt should be less than 43% of your pretax income.
- Your home debt (monthly mortgage, insurance and taxes) should be less than 31% of your pretax income.
What next?
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No matter where we turn today, news about the economy and real estate market surround us. Foreclosures around the nation are on the rise, including Wisconsin.
As foreclosures have increased numerous strategies have been put in place to help limit the number of homes that ultimately end up in foreclosure including:
- agreements with the lender
- temporary forbearance
- loan modification
- short sale
Still, many Wisconsin homeowners are unable to stop the foreclosure process causing the number of foreclosure filings in the state to rise 21.4% from 2007 to 2008. This is the second consecutive year with a 20% plus increase.
Area Foreclosure Results
Wood county saw an increase of 45% in the number foreclosure filings in 2008. The total number of homes increased from 143 in 2007 to 207 in 2008. But we are not the county with the largest increase…
Adams county had the largest increase of any Wisconsin county, increasing 80% to a total of 222 homes in 2008. In central Wisconsin Juneau county increased the least by only going up 4%.
Overall, only 6 of 71 counties (Portage did not report) saw their number of foreclosures decrease or stay the same. Eighteen counties saw an increase of 30% or more.
This past weekend I heard that 45% of Americans are worried about making their next mortgage payment.
You can see a breakdown by county by clicking here.
It is my sincerest hope that none of you have to experience a foreclosure, either personally or through a friend or family member. If you see yourself falling behind please be proactive and seek help early.
Special Note: If you need assistance, or just want to know where to start, please get in touch. I have many contacts in the Wisconsin Rapids area and would be happy to help you find the help you need.
PHONE: (608) 542-0178
My name is Adam Holberg and I’m a Realtor with First Weber of Wisconsin Rapids. This website is designed to inform and help bring conversation to a topic I love, real estate.