If you have been looking for the opportune moment to act on buying a new house or refinance your mortgage, you are running out of time. As the housing market continues to improve, the prices of houses and interest rates are going up. To benefit from the current market, there are certain tips that you should take.
Procrastination is not your friend. If you keep waiting to refinance or to purchase a new house, you may end up missing out on some great deals. According to Fox Business, interest rates are expected to rise by the end of 2013. With more than half of the year already gone, your time to act is limited. By acting now you could still end up getting a great deal on refinance options and interest rates on your new home.
Improve your Credit
Improving your credit score is essential when you plan on refinancing your house. Without a high credit score your options will be extremely limited. If you are a first time buyer, you will need to make sure that you have good options given to you. If you do not have a good credit score, these options will not be provided to you. By taking the time and putting in the effort to improve your credit score, you will be setting yourself up for a better financial situation.
Buy While the Market is Still Low
If you make your purchase while the market is still low, you will have an easier time paying your mortgage than if you were to wait. Since the housing bubble burst, the housing market has been more of a buyer’s market. This is mainly because people stopped buying, the worth of homes dropped, and home owners had to lower the prices on the homes that they were trying to sell. Since the market has begun to recover, the prices of houses are going back up, which will make it more difficult to afford a new mortgage payment. If you buy now, however, you will still be able to take advantage of the low prices.
FHA vs. Conventional Loans
Many buyers will choose a Federal Housing Administration (FHA) as opposed to a Conventional loan. This is because an FHA will allow you to purchase a home with as little as 3.5 percent of the selling price as a down payment. However, the fees that come with having a FHA loan are expected to increase in 2013. Conventional loans, on the other hand, have a requirement of 5 percent for your down payment and come with fewer fees. You will want to do some thorough research and compare your options with an FHA loan and the options that you will have with a conventional loan.
It is important to act on the market while your options are still good. If you fail to take advantage of this market, you may end up being stuck with high housing prices, and high interest rates. If you are thinking about refinancing your loans, your window of opportunity may be closing as 2013 comes to an end.
We refinanced in 2012 from a 30-year, 5.5% mortgage to a 3.5%, 15-year mortgage. Have you refinanced recently? What were the terms?