Wisconsin Rapids mortgage rates are the lowest they’ve been in years. Is your current mortgage payment to high or will your mortgage payment be adjusting to a higher rate soon?
Now that Wisconsin Rapids mortgage rates are the lowest they’ve been in years refinancing your Wisconsin Rapids home may be in your best interest.
The US Government has made it clear that they will do what they can to keep our economy moving forwards (or attempt to get it moving forwards…) — and keeping mortgage rates low is a key ingredient.
If you’re a Wisconsin Rapids homeowner locked into a higher adjustable rate mortgage or even a conventional fixed-rate mortgage this may be your best opportunity to refinance into a lower rate.
Refinancing your mortgage involves paying off your old mortgage with the proceeds from your new mortgage.
Why Refinance Your Wisconsin Rapids Home Loan?
Wisconsin Rapids home owners refinance their home for many reasons. Many want to use equity to pay expenses including credit cards, college expenses, home repairs etc. Another popular tactic is to simply keep the equity in your home which will lower your new mortgage payment.
Another reason to refinance is to improve the terms of your current loan. Change your 15 year mortgage loan into a 30 year home loan or vice-versa.
When is refinancing in your best interest?
- Any time you can lower your interest rate by more than 1% your mortgage is an excellent candidate to be refinanced. Over time you’ll likely come out ahead.
- In order to receive the lowest rates many lenders will require you have at least 20% equity in your home.
- You don’t need a jumbo loan. Rates haven’t come down much for loans greater than $417,000 so refinancing isn’t in your best interest.
Your next step is to contact your mortgage lender today to lock in your better rate.
A pre-qualification letter is an unverified, free test run of the loan application process. The lender will use your income, monthly debts, credit history and asset information as well as electronic credit reporting to verify your credit worthiness and estimate what you can afford for a mortgage payment.
A pre-approval letter is a firmer commitment by the mortgage lender based upon a complete application with a fee, credit check and employment verification.
A pre-approval letter says that a mortgage loan is approved for a certain amount of money for a certain amount of time, which is subject to an appraisal of the property.
If a pre-approval letter is required in your offer to purchase, the offer should clearly state what is needed and in what form. Because a pre-approval letter might be mistaken for a loan commitment, which will waive your financing contingency, your lender should indicate in your pre-approval letter that it is not a loan commitment.
You can see their are 3 levels that you’ll go through to complete the purchase of your next Wisconsin Rapids home.
First, a pre-qualification letter lets you know where you stand and is a guideline you can use to know how much home you can afford.
Next, a pre-approval letter is a more thorough evaluation of your credit and income. The pre-approval letter is guaranteed for a specific amount of time for up to a specific dollar amount and interest rate.
Lastly, a loan committment signifies that the financing contingency has been met and that financing will not hold up the closing on your new home.
Thanks to Wisconsin Real Estate Magazine
Photo Credit
The Federal Reserve continues to try and boost the national housing crisis. Mortgage rates on Thursday fell to a 37 year low. Average rates on a 30-year fixed rate mortgage rate declined to 5.19% down from the previous low of 5.47%.
The government’s aim in these debt purchase programs is to bolster the mortgage market, free up lenders to make new and lower-rate loans and stimulate the worst housing market since the Great Depression.
Mortgage rates should stay low and we will stay below 6 percent throughout much if 2009 as the Fed continues to pour money into mortgage-backed debt with the goal of keeping mortgage rates low.
In the previous two months 30-year fixed rate mortgage rates have fallen more than 1% and it appears like rates will “continue to remain low for the majority of 2009 as well” said HSH vice president Keith Gumbinger.
My intial thoughts:
- Now is an excellent time to buy. Wisconsin Rapids home prices are very reasonable and their are many different homes to choose from (no matter your price range).
- This is also the time to refinance.
- If you think you’ll be selling your current residence in the next couple of years, you should seriously consider selling now.
Why sell now?
At some point interest rates will rise again. Lets say mortgage rates eventually climb back to 6.25%. The payments on a $150,000 mortgage would be:
- 5.19% = $822.74 per month
- 6.25% = $923.58 per month
As mortgage rates climb back to “normal” your mortgage payment will have gone up over $100 per month for the same loan.
What that means is you may not be able to afford a $150,000 mortgage at the higher interest rate. In order to keep your mortgage payments the same, in two years you’ll be purchasing a home worth less than your current home.
At an interest rate of 6.25% a $133,500 mortgage will equal your payment on a $150,000 mortgage at 5.19%.
In essence you’re losing over $16,000 in buying power when mortgage rates go back up. This will cause less homes to be on the market as well as less people who are willing to buy, especially if they take advantage of today’s low interest rates.
Read this for more information on how dropping interest rates will affect your buying power.
Click here to see a graph detailing interest rates since 1971.
Update: interest rates did hit 4.5% last week, for all of an hour…
Sources: Home Loan Rate Flat After Fed Cut and Headed Lower and Yahoo! News
As mortgage rates continue to fall, the Department of Veteran Affairs is also lowering interest rates for veterans who qualify.
The Wisconsin Department of Veterans Affairs is currently offering a 30 year fixed mortgage at a rate of 5.875% to any qualifying Wisconsin veteran. Only a 5% down payment is needed and their is no private mortgage insurance (PMI) requirement. Click here to see what your payments would be.
There are no income limits for this program and the maximum mortgage amount is $385,000.
To obtain the required Certificate of Eligibility to participate in the home loan program, veterans should contact their local County Veterans Service Officer.
For further information about WEVA loan programs click here to visit their web site or call (800) 947-8387.
Mortgage rates continue to remain low in the Wisconsin Rapids area. If you’ve taken care to lower your debt and increase your credit score getting a loan for a new home continues to be simple.
Here are current Wisconsin Rapids mortgage rates:
- 30 year fixed rate — 6.125%
- 15 year fixed rate — 5.875%
- Jumbo 30 year — 7.12%
- FHA 30 year — 6.5%
- 3/1 ARM — 4.607%
- 5/1 ARM — 5.548%
Are you a first-time home buyer? Remember, if you purchase your first home between now and July 1, 2009 you’re eligible for up to a $7500 tax credit. Click here to learn more.
Ready to start looking for your next Wisconsin Rapids home? Click here to get in touch. Now is an excellent time to buy your next home. High inventory… Winter approaching… Antsy homeowners…
Stay up to date on the current Wisconsin Rapids real estate market here. Ready to sell? See what your home is worth by filling out this short form.
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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.