The mortgage rates in July of 2011 have been near historic lows; with 4.63 for 30 year period and 3.82 for 15 year period. Lower loan rates help consumers improve cash flow, reducing the burden of payday advance loans. The general mood of a larger section of the population in the county is still pessimistic according to market experts with the credit crunch market, higher credit requirement, higher down payment requirements and an unreliable job market. As such, home buyers are still awaiting a dip in the rates further before they make a move.
The Mortgage Bankers Association (MBA) says the mortgage rates that were at 4 percent at the latter half of 2011 began to rise to 5 percent January 2011. By the mid of the year 2011, we are seeing the mortgage rates dipping to 4.6 percent. By 2012, the mortgage rate is expected to touch 6 percent. According to MBA, the mortgage rate at 5 percent is still considered historically; so if it is below 5 percent as it is now, it is better to avail of it.
To improve the sentiments of people towards buying a house and specially honing the interest of first time buyers, one should bring down the down payment requirements. As of now, lenders are asking for 20 to 25 percent of the money upfront before giving away the loan. But then most people, especially the first-time buyers are not able to dole out such large sums of money. Also Fannie Mae and Freddie Mac, who back 90 percent of loans that are government backed, ask for a credit score of 760 which is out of reach for 60 percent of adult Americans.
Refinancing activity according to experts should drop in the next few years. They are below 42 percent of mortgages in the current years and will steeply decline to 26 percent of mortgages in 2012 when the rising mortgage rates go up.
Irrespective of mortgage rates going low this season, the twin challenges of people are an unpredictable job market that result in low or unstable earnings and low credit score. One has to step both of these factors in order to qualify for mortgage. So it is better to sacrifice the loose spending habits, reduce dependence on credit card, payback loans on time and increase net worth by investing in instruments that can appreciate on a short-term as well as long-term basis. Dual jobs are the order of the day, so that in case, there is an issue with the first one, there is another one to fall back on. Also, if one is aiming to buy a house in the near future, it is better to get moving before 2012. You can shop for prospective lenders; meet with them to determine the cost and availability of loan that can fit your needs.