The current housing market is a wonderful ally for home buyers, as home values drop and sellers are willing to negotiate. Home shoppers previously shut out of some local markets are discovering that the scales have tipped in their favor, potentially saving them tens of thousands of dollars over last year’s prices.

Still, there are other ways for buyers to save, even beyond the cost of the house itself. Lets take a look at the three areas where home buying costs can be trimmed:

At the point of sale — Maybe you aren’t aware of just how depressed the housing market is in the area that you live. It can be easy to miss especially if you live in a metropolitan area where some neighborhoods are experiencing steep declines in housing values while others are stable, even rising. Get with a realtor who can supply the information that you need for the area you are considering. She’ll be able to go over the buying and selling trends including how long homes are on the market, recent sales, etc.

At the point of financing — Competition is fierce in the mortgage industry, especially as the number of mortgage companies suffering from the sins of their past (i.e., interest free and other risky loans) continues to rise. Even mortgage companies who aren’t saddled with a lot of bad loans are finding that their customer base has shrunk with many laying off workers. The remaining companies all want your business and, if your credit score is at least 700, you are the catbird seat. Negotiate the lowest rate and fees possible and get that information in writing — brokers would love for you to pay more for your mortgage (higher commissions for them), but if your credit is excellent you can avoid the heavy fees and higher interest rates.

At the point of closing — Closing costs can easily add up to $5000 or more, making the day that you buy your home one filled with mixed emotions: on the one hand you’re happy to get the home, but on the other hand, your wallet just took a huge hit. Some mortgage companies are absorbing most if not all of the closing costs to entice you to their product which is fine but only if you aren’t getting hit with a higher interest rate and other fees. You can also ask the home’s seller to pay for some of these fees too, perhaps making closing day pain free from a financial vantage point.

Take Advantage of the Market While It Lasts

Not everyone is in a financial shape to buy a home now, but if you are you just could find yourself owning a home that will appreciate greatly once the market rebounds. Buy at a price below market value, secure the best loan available, and have someone else pay your closing costs, to save tens of thousands of dollars on the price of your new home. Current market conditions will change — waiting for prices to bottom out could mean that you will miss a perfect opportunity to jump in.

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Adv. — Once you buy your home, will you need to renovate it? If so, Let’s Renovate has lots of cool ideas and project information to ensure that your renovation goes according to plan. Stop by today to lay the foundation for your new home renovation project!

Tags: closing costs, Home Buying, home sell, mortgage broker, mortgage rates, new home, real estate agent, realtor

Consumers have been keeping close tabs on federal interest rates, witnessing a three-point decline from 5.25% to 2.25% in a six-month period. For people seeking to refinance their existing loans and for prospective homeowners needing a first mortgage, the lowered interest rates is good news.

However, unlike five to seven years ago when the federal rate dropped to a near historic low of 1%, mortgage interest rates are not likely to go much lower even if the Federal Reserve Bank decides to cut interest rates again. Other factors, namely a slowed economy, is impacting mortgage interest rates which means one thing: now may could be the best time for you to take action.

Mortgage Backed Securities

Another factor determining mortgage interest rates are mortgage backed securities, those funds which finance a large pool of mortgages today. Banks typically sell off home mortgages to secondary markets, but inflation fears and the credit crunch have kept mortgage rates from dropping. Investors are shying away from mortgage backed securities, preferring less-risky financing options.

Wait It Out?

Some financial analysts predict that a further easing of mortgage interest rates could occur this summer as the housing market begins to heat up again. A stronger housing and the easing of the current credit crunch can spur interest in mortgage backed securities, driving down rates across the board.

Further Reading

Dollar Gains on Speculation Fed’s Actions Will Revive Growth

Fed’s bold moves: Band-Aid or breakthrough?

The Fed’s Interest Rate Cut Doesn’t Mean Mortgage Rates Will Fall

Resources

Home Purchase Loans

Home Refinancing

Tags: fed rate, federal reserve bank, FRB, home refinancing, mortgage backed securities, mortgage rates, mortgage refinance

Seizing an opportunity is all about timing, therefore for the person who owns a home and is looking to refinance, consideration must be given today whether to seek a new loan immediately. Why the rush? Because, no one knows what mortgage rates will be six weeks or six months from now. They could continue to drop, but they can just as easily start climbing again.

Take Action Now If You Need To Refinance

If you’re like the vast majority of American homeowners who is satisfied with their current mortgage, then you need not do anything. However, if you are part of that small segment of homeowners who is in danger of losing their homes or under financial pressure as their mortgage rate resets, then taking action as soon as possible is advisable.

Aren’t Rates Set By The Fed?

Rates are affected by what the federal government does, particularly as the federal rate fluctuates, but that is only part of the equation. Your specific rate is actually determined through secondary markets such as Fannie Mae and Freddie Mac, mortgage investment arms founded by the federal government.

Fannie Mae and Freddie Mac, along with other mortgage investors, buy up loans that lenders make and either hold them as an investment portfolio or bundle them with other loans into mortgage-backed securities. These securities are sold to mutual funds, stock investors, and other parties, who trade them much the same as Treasury securities and bonds are traded.

Take Action Now

Perhaps you are waiting for mortgage rates to slip another 1/8 to 1/4 percent before you take action. Unfortunately, even if the Federal Reserve cuts their fund rates as they are expected to do once again in March, there isn’t a guarantee that mortgage rates will also decline. In fact, sometimes a slight up tick in financing rates takes place. Again, other factors weigh in besides the fed rate.

Yes, everyone wants to receive the lowest rate possible when financing a home, car, or special project. But, to delay can be costly adding hundreds of dollars annually to loan costs for consumers who gambled and lost.

For more information about refinancing, please visit SayLending.com to make the right choice in home refinancing. Check out the helpful smart money tips to learn about important ways for you to save money.

Tags: Fannie Mae, Freddie Mac, home refinance, mortgage loan, mortgage rates, smart money tips