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Today's real estate market has been changing since the early part of 2006.
For those of you who have been watching the television lately, the housing market has taken a large dip in pricing all over the country.
The one thing that has had little coverage is that real estate interest rates have not gone up but have gone down, a little at a time, over the last few months. There will be no rate changes one way or the other until after the first of 2007, and maybe not even then.
A fixed conventional interest rate for a 30 year period is still really good. There are lenders offering 30 year fixed rate loans but are giving what is called 40 or 50 year amortization due in 30 years.
This makes it easier for buyers to qualify for home loans as a 40 or 50 year amortization lowers the monthly payment, but the loan is still not due for 30 years.
There are also 40 and 50 year amortization loans available as a first trust deed at 80% and a second trust deed, with a good interest rate, at 20%, giving a buyer the ability to finance the entire purchase price of a home and pay only for closing costs.
This type of loan will still lower the monthly payment and give the buyer an opportunity to purchase a home for a slightly higher price and get a home in a better area or maybe a larger home.
If you have good credit scores, you can also qualify for the option arm loans, which could reduce your interest rate significantly, however, these types of loans are really great for the short term, about a maximum of 5 years.
The option arm is a great loan for investors because their house payments are lowered and rental payments from tenants are usually a little more and sometimes a lot more than the payment being made. The owner or landlord has a tax deduction on the total house payment as this would only be interest.
As an investor, however, using the right type of option arm is essential. Lenders offer several different types such as a fixed interest rate that does not change during the time of the option arm period and there is also a variable type of interest rate that will be adjusted according to the index and margin during the time of the option arm.
An arm is an adjustable rate mortgage loan.
Time periods of option arms range from 2 years to 10 years. Be sure to choose what works best in your situation.
As far as real estate loans go, there are many different kinds. Loans are decided according to credit scores, income, debts, and your particular situation.
You can get a 30 year fixed, 15 year fixed, 2 year fixed then change to adjustable for 28 years, 3 year fixed than change to adjustable for 27 years, regular arms and option arms and many other loans in the middle.
The bottom line is that, as a buyer, you have many choices in the purchase of a home. As a savvy buyer, you will make the right choice.
Patti Schopper has been in the real estate industry over 36 years, practicing in the Inland Empire, Southern California. She is a seasoned real estate agent and senior loan officer. Her goal has always been to keep the wants and needs of her clients first. Should you have any questions, please feel free to contact Patti at www.realestateandloans4you.com |
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