How Important is Your Interest Rate?

I read this article and thought you would find it interesting and very appropriate for today's market. I will restate something that is stated in the article below...Now is a great time to buy. There are some people that feel they should wait to see if homes prices will come lower. The problem with that is by the time you think the prices have hit bottom, you will have missed it. It is like trying to guess when to buy a stock at the lowest point.

I hope you find the article interesting and helpful.

Financing Solutions with David Reed

What interest rates really mean

The Fed did this! The Fed did that! Rates are up! Rates are down! Aaaagggh! Okay, now exhale. In turbulent economic times the media can't wait to report what interest rates are doing. Pundits prognosticate, forecasters forecast and soothsayers sooth. When should you buy a home based upon interest rates and when is it the right time?

The fact is that interest rates, while important, have little impact when it comes to buying a home. Alright, alright, I'll admit: it's important...but it's not a deal-killer.
There is a fixation on what rates are doing. A fixation on what rates will be in the future and what rates were in the past. I've heard potential home buyers tell me, "I'm not sure I want to buy now because rates are ¼ percent higher now and I think I'll wait." I say, "Wait for what?" I say let's not look at the rate but instead concentrate on what that rate actually represents ... your monthly payment.

Let's look at what an interest rate move of ¼ percent really does to a $200,000 mortgage. Say a 30-year interest rate at 6.00 percent "jumps" to 6 ¼ percent. Shall we sit on the sidelines, thinking such a move is suddenly unaffordable? No. The payment on a $200,000 loan "jumps" by about $32 a month!

Now let's get a bit more draconian and look at a ½ percent increase and the monthly payment increases by $64. Putting that into daily financial terms, $64 is about a tank of gas. While not insignificant, it's hardly a reason to stay on the sidelines of home ownership. Right now, buyers should have more urgency than ever. Home prices have declined enough to make buying more affordable than it's been in recent memory and interest rates (whether at 6 percent or 6 1/4 percent) are historically low. It's time to act.

Are rates important? Sure they are. But are they the end-all? Heck no. Interest rates over the past few years have been in a very tight range, with few major swings. Just remember what interest rates represent, your monthly payment, and pay less attention to the headlines.

Are You Tired Of Negative News About Where You Live?

Do you ever get tired of turning on the news or picking up a paper only to hear or read how bad everything is? I guess our society is geared towards paying attention to bad news then to look for the positive.

It seems ever day you hear about the housing bubble, credit crisis or job losses.
While I realize our country and in particular Michigan is going through some tough economic times, it is not all doom and gloom.

Th next time you get tired of hearing the negative on tv, I suggest you get on-line and go to http://www.lakeshoreadvantage.com/ to see some positive information about the West Michigan area. Below are a few of the highlights from this site.

The Lakeshore is home to some of the World's Greatest Companies: Herman Miller, Haworth, Gentex, Johnson Controls, Magna Donnelly, Heinz, Sara Lee, Conagra, Siemens, Boars Head and Dr. Pepper to name a few.

The Lakeshore was named in Forbes Magazine's top 200 Best Places for Business and Careers.

Gentex is the third largest producer of patents in the State of Michigan.

West Michigan area ranks 6th among the world's 125 top knowledge based economies.

Of people 25-44 years of age, 33.9% have college degrees, 20% above the State average.

The Lakeshore ranked 7th in Forbes top savings cities that are doing the best job of building wealth.

These are just a few things that make are area so wonderful. Couple this with the beautiful beaches of Lake Michigan and things don't look quite so bad.

Everything goes through cycles, good and bad. We need to stay positive to weather the storm. The good news is we have a strong foundation in which to build even greater things!

Do You Understand Your Financing Options?

There is a lot of information being put out in the media about the credit crisis and the ability or inability to get a home loan. While most of the media attention tends to be negative, the reality is....it isn't as bad as they would make you believe. Please read the article below. I hope this clears up a lot of the misconceptions. Please contact me if you have any questions.

Financing Solutions with David Reed

Overcoming the misconceptions about the "credit crisis"
You’ve watched the news and read about it in the papers. You know, the “credit crisis” and how buyers need 20 percent down in order to buy a home? And even if you found a buyer with 20 percent down, lenders aren’t making loans anyway. So, why bother, right? Wrong!
We’re right smack in the middle of what just might be the biggest disservice ever perpetrated on potential home buyers. It seems the press just can’t get enough of all the gloom and doom in the housing industry. The fact is that mortgage money is as available today as it was a year ago and loans are being made this very moment with little or no money down. And, no, platinum credit isn’t required. You just need to know where to look. Who are these lenders? They’re right down the street.

Federal Housing Administration (FHA) loans are exploding onto the mortgage scene; recent estimates are that one out of five mortgages are FHA loans. FHA loans never went away, their reemergence is a result of the collapse of the sub-prime market. FHA doesn’t technically have a minimum credit score, although, in practice, lenders won’t approve an FHA loan with a credit score below 500. But that’s a far cry from the notion that an 800 score is the only thing lenders care about.

The best part? FHA only requires 3 percent down. 3 percent. And that 3 percent can come in the form of a gift or grant. FHA borrowers only need to have $500 in a transaction. All the while, FHA mortgage rates are as good or better than their conventional counterparts.
Low or no down payment, extremely competitive rates and easier qualifying. No wonder FHA is moving up the charts!

Please contact me if you would like more information about FHA loans or help getting into your first home.