When rates began to rise last spring, widespread public panic ensued like a Godzilla invasion.
A blanket of amnesia befell over American consumers as rates inched above 4%, inciting a “run for your life” mentality. Only less than a short decade ago, borrowers bragged at cocktail parties about the7.5% rate they scored from their mortgage lender so why the alarm?
Rick Allen, chief financial officer at MortgageMarvel.com tells Philly.com that the window has not closed for a great mortgage deal. “Don’t panic,” he says. “The increase in interest rates is significant but not dramatic, and there’s still plenty of room for people to buy.”
The average 30-year fixed mortgage loan rate stands at 4.62%, down from 2013’s high of 4.8%. The Mortgage Bankers Association reports that refinances and purchases rose 5.5% for the week ending September 20 so consumers are still taking advantage of the low rate environment.
Allen contends that although mortgage rates are expected to rise, he doesn’t predict any sharp gains adding, “Maybe it’s a good sign from an economic perspective, that the economy is coming around and people are feeling better.”
In fact now may be the perfect time to buy while both rates and prices continue to remain on the lower side. Although home prices rebounded quite heartedly this summer, economists believe this spike may have been quondam phenomenon--at least for now.
David Blitzer, chairman of the index committee at S&P Dow Jones Indices told USA Today that increases "may have peaked." Case-Shiller data pointed out that prices in Miami, Florida were up 1.2% in June from May but only rose 0.5% in July. Other cities like Portland, Oregon and San Diego, California experience significant and similar increases in June as well but then leveled off during the summer months, a typical peak selling season.
Touted as one of the better deals around, credit union mortgage rates continue to be at an all time low. A vast number of credit unions are offering rates at or under the national average providing a unique window of opportunity for borrowers.
Although rate is important, how do you find the overall mortgage loan situation that best serves your individual needs?
‘‘Educating oneself is really important,’’ Bob Walters, chief economist for Quicken Loans tells The Boston Globe. ‘‘Talk to a couple of mortgage bankers until you feel comfortable with one. That’s going to be the best source of information.’’
Experts also urge borrowers to entertain all of their options including whether they qualify for a VA or FHA loan. Then you should examine your debt-to-income ratio and assets while pondering if a conforming, high balance conforming or jumbo mortgage loan is the best fit.
Overall, Walters says the borrowers should get help from a trusted advisor. ‘‘Find a person who is asking you a lot of questions about what your situation is -- to find out the best choice for you -- rather than just quoting you a rate. It can be frustrating at first when somebody is asking a lot of questions. That tells you you’re dealing with a professional. You wouldn’t want to go to a doctor who didn’t examine you and just said, ‘How do you feel?’ ”
Your credit union is a great place to begin. Contact your local credit union mortgage loan professional today to open the dialog.By Gina Ragusa