Mortgage Refinance Guide

The housing market may at last be reaching its peak. This means that the appreciation of home values will slow and could mean hot water for homeowners that purchased more home than they could afford. That’s the assessment of many, stating that the the drop in housing has been a long time coming. Sales have been shooting through the roof this summer, establishing new records for the purchase of new and existing homes. With home prices so high, many new buyers are seeking more “non-traditional” forms of financing to qualify for the purchase.

Some potential buyers have held off on their purchases for fear they would buy the top of the market; after purchasing their home they would see values drop. It is very difficult to time the housing market; if you are buying because of relocation and you will not be moving again, then you are better off to buy now. Chances are that even if the home value goes down, prices will resume rising and you’ll come out ahead when you’re ready to sell. Homeowners that have adjustable rate mortgages (ARM), should now refinance to a fixed rate mortgage loan. Interest rates are at the lowest levels in more than forty years. The recent shock to the economy from natural disasters should keep mortgage rates declining for some time. However, the long term forecast is that mortgage interest rates will start going up again and could peak above 7 percent. Homeowners who have been “playing the market” so to speak, buying homes and then “flipping” them for a profit, should reconsider their investment approach. This could be dangerous if home values stop rising. Retirement age homeowners who are in need of cash, might consider what’s called a “reverse mortgage;” this allows a them to borrow against the equity in their home. These types of mortgages forego payments as long as the homeowner lives in the house.

Trying to sell your home? Take heed; homes are staying on the market much longer before selling. A recent survey of mortgage lenders shows demand for home mortgages loans is down 11 percent this summer. How much of a slowdown there is and whether home values will drop depends on interest rates in over the next few months. The Hurricane might actually help the industry, due to declining mortgage interest rates. Analysts are forecasting that home sales will drop from their record levels by the end of the year. This declining pace should end the over-valued price gains in the housing industry.

Refinance a Mortgage - What You Need to Know

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