Buying a House Now with Record-Breaking Mortgage Rates

by 25 Jun 2012
As mortgage interest rates near all-time lows below 4%, more and more experts are recommending that this is an excellent time for renters and entrepreneurs to think about buying a home. Another factor that contributes to this timing is the rising costs of renting, which are shifting the rent-to-own ratio away from apartment living and toward owning your own home. In addition, projected improvements in the economy may mean that mortgage rates could soon increase, potentially closing this excellent window of opportunity.   Mortgage rates for a 30-year fixed-rate mortgage reached 3.66% in late June, after six straight weeks of record-setting lows. This decrease reached much lower than experts were predicting. Even other slightly improved housing numbers, such as more newly constructed homes and increased house sales, have not been enough to stop the descent. However, experts now caution that the turning point could happen at any time, and those looking to capitalize on the market may want to buy a home soon.   Opportunities for Residential Living or Investment   For those who have rented all their lives, this opportunity comes at the ideal time. Those able to switch to owning their own home are being encouraged to do so by financial experts from all areas. Slate.com says it boldly, "If you have the means, run to the nearest for-sale property and buy, buy, buy." While a few individuals may still have doubts about investing in the housing industry, the current situation has created a unique opportunity due to the strikingly opposite circumstances.   Those able to invest in homes as sources of income may be able to capitalize on the rent-to-home prices ratio, particularly in certain areas of the country. Rent has skyrocketed in Miami, Boston, Chicago and New York, and those able to buy housing cheaply may use low mortgage rates to their advantage. This is an excellent opportunity for all types of housing, not just city rentals, as communities that are growing will be able to support the rental of all types of housing. This includes homes under foreclosure, which may provide buyers with the cheapest up-front investment.   How to Capitalize on Historically Low Mortgage Rates   Applying for a mortgage requires efficient preparation of your current assets and income. Bring all current tax records and contact the mortgage broker prior to your appointment to determine exactly what is required. Your application is completed in person or online, and processed before the underwriter can determine if your loan should be approved. Often you may have to address certain "clearing conditions" that may hold up your loan. Once your loan is cleared to close, you meet with your mortgage professional again and close the loan with a signature.   Choosing a mortgage lender that has secured a surety bond will help protect you in the case of mistakes or fraud. These bonds work like insurance that pays the customer when there is an error or other problem on the mortgage lender's end of the transaction. This simple step of looking for a broker that is "bonded" with a surety bond can help you navigate the waters of choosing a lender.   This article is written by the National Notary Association, providing education and service to Notaries throughout the United States.

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