I was asked to help spread the word about the lender Savings First Mortgage. Right now is THE best time to buy a house and if you are in the house of your dreams you should refinance now .
We are all struggling with the economy. Some families are actually struggling to put food on the table for their entire family. I consider my family very lucky but here are some facts presented by Savings First Mortgage:
The Effects of A Bad Economy
The first and most important reason to refinance are the falling home prices that reduce your equity, which in turn reduces your refinance options.
According to Harry Korotki, President of Savings First Mortgage, “eligibility depends on how much equity you have in your home.” Here are the basics:
· Be aware that the best rates are reserved for borrowers with total home loans equal to 80% or less of a home’s value and good credit scores.
· The less equity, generally, the higher the rates and the stricter the mortgage terms.
· Equity benchmarks are at 60%, 65%, 70%, 75%, 80%, 85%, 90% and 95%. Each benchmark you pass, the higher the rate and the less options you have.
If your equity decreases because home prices are falling in your neighborhood, you may end up owing more than your home is worth, in which case many lenders won’t take your application. If this is your situation, it’s called being “upside down” on your loan. Savings First Mortgage can help, as they access to special government loan programs specifically for this problem.
Other Effects of a Down Real Estate Market
Also, consider how this market is affecting appraisers. Just a year ago, appraisers were under a lot of pressure from lenders to value homes at a high price. Sometimes there was even collusion. Now, appraisers are nervous for their jobs and are much more conservative.
If an appraiser values the home in the above example at $220,000 instead of $225,000, you’ve risen above the 90% loan-to-value benchmark and have less refinance options.
Why Not Wait For A Lower Mortgage Rate?
Not even the experts can agree on how long this downturn will last. Recovering from past real estate slumps has taken some markets as long as a decade to fully recover.
Waiting to refinance is a gamble not worth taking unless there are strong real estate values in your neighborhood. Look around: are there few or many unsold homes in your area?
Even if prices are stabilized in your neighborhood, rates may increase. If they even rise by 1%, you’ve lost out on the opportunity you have now.
If prices have already dropped in your neighborhood, or there’s more than a six-month supply of homes in your market, you should think about refinancing now.
For a free, no obligation consultation to learn all your loan options, call 866-356-4900 or visit the Savings First Mortgage Website here:
Savings First Mortgage Refinance
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