4.5% Mortgage Rates Why Not To Wait
There has been plenty of talk recently about 4.5% rates for mortgages. While right now it is nothing but a campaign promise, or a blast of hot air. The talk has been helpful at lowering rates, but not to 4.5%. Rates are as low as they have ever been period. But, waiting for the fantasy to become reality could be disastrous to you. Why do you ask? Well aside from the obvious that the rate might not ever be a reality, here are some other pitfalls that can be a reality:
You could lose your job. No job means no loan, and you have no doubt seen all of the articles about layoffs recently. Even more so than usual this is a real possibility right now. You could also get sick or become injured and end up with a reduction or elimination of your income. Think this wont happen check out the stats on disability insurance and you can see how likely this really is.
Guidelines could change. No longer is 20% equity a guarantee that you can do what you want to do. For example Freddie and Fannie have recently changed their guidelines and lowered their maximum LTV for cash-out to 85% from 90%. On top of that lenders and banks could tighten their guidelines, daily we get updates on guideline changes.
Your neighbors could lose their house to foreclosure and reduce the value of your house. I know you have read the stories of the foreclosure crisis we are going through and it is only time before it it strikes near you if it hasn’t already. How can this effect your future hope of refinancing, well each foreclosure has the possibility of reducing property values, the lower the value of your how the greater the possibility you don’t qualify or you pay a higher rate because of a higher LTV.
My advice, refinance today. Get the greatest rate you could ever get. If rates really do drop to 4.5 or what ever, refinance again. It will be worth it. Why lose the saving you CAN get for the savings you MIGHT get? Isn’t the saying “a bird in the hand worth 2 in the bush”?
