Flying Low: Taking Advantage of Low Mortgage Rates

As of late, the American real estate market is enjoying near historically low mortgage rates thanks to the actions taken by the Federal Reserve to stimulate this result. Those who have yet to purchase a property might be wondering what exactly low mortgages mean to them. In a nutshell, low mortgage rates confer a number of benefits to buyers and existing property owners, and such boons can potentially translate into big savings.

Flexible mortgage loans will be the most affected by the reduction, since these loans usually follow the Federal Reserve’s dictated rates. Homeowners with these types of loans can expect to pay less for their monthly installments. Householders can also take advantage of the low rates and take out a home equity loan. This allows borrowers to capitalize on more lenient rates and make the most out of a large equity value.

With low mortgage rates dominating the market, it might be wise for some homeowners to consider refinancing their old loans. However, some careful thought and planning needs to be done before refinancing a mortgage. Householders should consult with either their lender or with an industry expert to determine whether or not refinancing can truly save cash in the long run.

The Crucial To-do List for First-time Home Buyers

Buying your first home seems like a daunting undertaking, but these guidelines can help you overcome the hurdles of what could be the biggest financial decision you will make in your life:

• A good credit score can give you better loan terms, and will help secure lower down and monthly payments. Lenders see favorable credit scores as an indication that the borrower is financially reliable and will be able to live up to his or her loan obligations.
• Take a good look at your financial situation and assess how much you are willing to pay for a new home. Experts say that the ideal home payment should be no more than 28% to 30% of your gross monthly income. It pays to remember that stretching your budget can lead to financial woes down the road, which can cost you your dream home.
• Before you even start shopping for a new home, start the process of getting the right financing by getting pre-approval for a mortgage. This will help you in finding a home that you know will get the right financing from lenders.
  Be prepared for down payment and closing costs. The down payment can be anywhere from 3.5% to 20% of the purchase cost, depending on your loan. Closing costs depend on your home’s location and are typically 2%-4% of the purchase price. Utah ranks 39^th among all states in closing costs, with US$2,316 on average.

• Make sure to buy a home you will be truly happy with.