Is Now The Time to Buy?

Here are 3 more articles all from The Wall Street Journal this weekend.  You can develop your own opinion from them but as I have said in the past it is a great time to buy for certain people.  One thing is for sure, interest rates and fees will be going up.

If you need additional help in making that decision make sure to consult a mortgage professional and your financial planner.

http://online.wsj.com/article/SB20001424052748703905404576164720668195108.html

http://online.wsj.com/article/SB20001424052748703803904576152751927679680.html

http://online.wsj.com/article/SB20001424052748704520504576162632959543492.html

Should You Get An Adjustable or Fixed Rate Mortgage?

It’s a tough call especially now when interest rates have been in the rise and the spread between fixed rate and adjustable rate mortgages is at an all time high.  Even though rates have risen they are still at historical lows.  We have all gotten spoiled because they were in the low 4%’s and high 3%’s at one time.

Let’s do some comparing.  We will use a purchase price of $200,000 with 20% down which will leave us with a loan amount of $160,000 all paying no points.  Keep in mind most rates that you find online are with paying a 1% or more loan origination fee which is 1% of your loan amount so in this example it would be an extra $1600.  Make sure you are always comparing apples to apples.

The payment on a 30 year fixed at 5.125% would be $871.18, on a 7 year adjustable at 4.5% it would be $810.70, and on a 5 year adjustable it would be $752.38.  That can add up to a lot of money saved if, and it’s a big if, you decide to sell.

I think a 5 year adjustable is a very short period of time and should only be used for a very select few.  There is no rule of thumb for everyone.  Remember, with adjustable rate mortgages there are caps that prevent the rate from going up past a certain point each adjustment period.  Make sure you know what your margin is, the initial rate adjustable cap, and the ceiling on the rate.  Always talk to a mortgage expert. 

Below is a great article from MarketWatch on this topic too:

http://www.marketwatch.com/story/adjustable-versus-fixed-rate-mortgages-2011-02-16?siteid=rss&rss=1     

What You Need To Know When Buying A Home

I have talked about this so many times and the article below does a great job and reiterating what I have said in the past. Always make sure to consult a mortgage professional in advance. Don’t decide to get the information the day before or same day you are going to go out looking at homes and putting in an offer.

http://www.cnbc.com//id/41411693