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Real Estate & Finance News That Affects Your Home                                                                                                 Page  1 2 3 4

OCTOBER 2009 - Page 2

GREAT RATES 8 Ways To Get The Lowest Mortgage Interest Rate When you get ready to buy a home (or if you're thinking about refinancing the one you own), you'll want to get the lowest interest rate possible. How can you get the best rate? Here are eight inside tips for today's stricter lending environment: Get a conforming mortgage, one guaranteed by Fannie Mae or Freddie Mac, usually carrying the lowest interest rates available. They're called "conforming" mortgages because they meet the organizations' underwriting standards (debt-to-income ratios, down payment or equity requirement, loan amount, etc.), allowing these mortgages to be more easily sold in the secondary mortgage market. Have a credit score of 720 or higher. The credit score requirement may vary somewhat from one lender to another, depending on their own standards and which credit scoring model they use. Make a 20% or larger down payment (or ensure you have at least 20% equity, if refinancing). Lenders are willing to offer lower rates to borrowers who have more "skin in the game" (greater ownership stake in the home). Buy (or refinance) a principal residence. Investment properties and second/vacation homes are easier for borrowers to walk away from, presenting more risk to lenders. Buy (or refinance) a single-family home. The value of multi-family properties (e.g., condos, duplexes, co-ops) can more easily decline based on factors unrelated to the particular home being financed. That's why loans for these properties often come with higher interest rates. Don't take a second mortgage, equity loan or line of credit to purchase or refinance the home. The more lenders who have a claim on your home, the more risk all of them assume. Pay discount points at settlement/closing. A point is equal to 1% of the loan amount. Usually, paying one point can reduce your interest rate by about .25%; two points .50%; etc. Calculate whether you are likely to own the home long enough to recoup the cost of points in monthly payment savings. Don't just look at the quoted interest rate. Fees charged by the lender will impact the overall cost of your loan, so pay attention to the APR (Annual Percentage Rate), which expresses the effective interest rate of the loan, taking lender fees into consideration. MOVING ON Many More Long-Distance Moves In '09 A Relocation.com survey recently reported that Americans are now moving longer distances and making more out-of-state moves compared with 2008, mainly due to economic issues such as job loss. The survey found that 70% of respondents moved 1,000 miles or more, compared with 36% of last year’s respondents who moved that far. If you are preparing for a long-distance move, we have a network of colleagues who can get you exactly where you want to go. Call us! Page  1 2 3 4