While the real estate market is still in the process of stabilizing, there is a definite silver lining that all homeowners should be taking advantage of these days. Interest rates are at truly historic lows. What kind of numbers are we talking about? How about rates on a fixed loan of 3.7 percent and another full point below that for variable loans. Think about that for a moment. When in your life have rates been so low? It is staggering. Looking a few years down the road, the rates on home loans will have nowhere to go but up. When they return to the six or 7 percent level, how happy will you be that you refinanced your loan and locked it in at a 2 or 3 percent level?

Can interest rates go any lower on these loans? Nobody knows for sure, but it seems doubtful since inflation is starting to rear its ugly head. I really don’t have to tell you this because you already know. Have your grocery bills gone up? How about the cost of clothes? The simple fact is when the government prints money to revive a dormant economy, it eventually leads to inflation. To fight inflation, the Federal Reserve Bank will have to raise the rates it charges banks to borrow money. The banks will then pass along that increase to the mortgage market. Refinance now and lock in the incredibly low rates that will probably not occur again in our lifetime.

When applying for a home loan, it is extremely important to avoid pitfalls and to collect the necessary information you need in order to choose a lender that provides advantageous terms&conditions. First of all, avoid signing a contract with a loaner that doesn’t provide clarity of terms, as it is crucial to perfectly understand what you’re signing for and have everything explained before signing the contract. Any ambiguous or unclear terms might is likely to indicate that the loaner is not trustworthy and reliable, so you should look somewhere else.

Not getting a loan pre-approval is another pitfall you should avoid when applying for a home loan. You should know for sure if you are eligible for the loan you plan to obtain, given the multitude of factors and criteria the approval is based on. Don’t get all too excited of having found the house of your dreams but no lender to give you the money you need because you have a bad credit score or bankruptcies on your credit history. Make sure you are not wasting time and money looking for a house you’ll not be able to pay for.

Also, pay close attention to the interest rate on your loan. Find out what you will be charged after the initial rate period expires. Usually, this happens after maximum three years, after which you will be charged the prime rate at that specific moment, plus additional fees. It should be all in the contract you’re signing, so make sure you avoid these pitfalls when applying for a home loan.

Before retiring from the mortgage business I would receive at least one call each week from someone asking me to tell them when rates will be at their lowest. I always told them the truth; I don’t have a crystal ball and neither does anyone else.

So here’s my theory for those of you who care about the best time to make a decision on buying a new home or refinancing the one you are in. You start with today because that’s all you really have to work with right now; this moment. Find out what the rate is for the type of loan you want and know that for right now that’s what it is.

If you are buying a new home, sit down with your loan officer and calculate what the overall payment will be and see if it fits into your budget the way you envisioned. If so, it’s a good rate and price for you and you can move forward with the help of your lender and realtor. If it’s not within your budget you are either looking at a house that is not affordable for you at the moment or the rates are too high right now.

If you are considering a refinance to your current loan, take your most recent mortgage statement to a lender and let them help you determine if it makes sense to refinance your current loan. This is more than just comparing payments because the new loan has additional costs to it that need to be factored in. If you make that cost up within the first two to three years due to a lower payment, it just might make sense to refinance your loan. However, when in doubt, get several opinions before moving forward.

Either way, now is a great time to check it out because rates are low right now and no one really knows what will happen tomorrow, next week or next year. That’s the truth!

Foreclosures are currently down 14.8 percent this quarter, compared to statistics of last quarter. However, this may not mean the housing market is on the up and up. Currently, the demand for housing, declining prices, and lack of credit for most Americans are all affecting the housing market negatively. So, even though less houses are being foreclosed, the American economy is continuing to affect how many houses are being bought and sold in today’s real estate market. While less homes in foreclosure is a good sign for our housing market, it may not be enough to pull us out of the housing slump for good. Housing trends are affected by a variety of external factors, and it’s important for Americans to remain optimistic, yet realistic about their current financial state and the state of the housing market.

A fixed rate mortgage loan is one in which the interest rate of your mortgage does not change, and neither does your monthly payment. This consistency is helpful for people who wish to budget their finances, but often the result is a high interest rate. An adjustable rate mortgage typically has the same interest rate for a set period of time (3-7 years). After this period the interest rate may change. The advantage of this type of loan is that your interest rates have a chance of going down. On the other hand, your interest rates may rise. An alternative to these types of loans is what is known as a Balloon loan. These loans have fixed interest rates that are typically as low as those with an adjustable rate mortgage. However, after a set amount of time (typically 7-10 years) the remainder of the mortgage must be paid in full. Discuss your financial specifics with your loan officer and make the most realistic decision for you.

When you participate in a reverse mortgage, you are taking out a loan on your house. Senior citizens can receive a lump sum, or monthly payments. Payment of the loan back to the bank is deferred for senior citizens until they pass away, the home is sold, or they are not living in the home any longer. This is desirable for many senior citizens because they are able to stay in their homes. What’s more, if done properly, senior citizens are still able to pass real estate onto their children and/or grandchildren once they pass away. Discuss your reverse mortgage options with your lender before making any decisions. For many seniors who don’t want to leave their homes, reverse mortgages add freedom and financial certainty they didn’t have before.

Your mortgage lender should not only help you get approved for a loan, they should help you get approved for a loan that is right for you. Mortgage lenders are there to assist you, and should put you in a situation you are completely comfortable. In addition to this, your lender should be well versed in all recent legislation, grants, rebates and other financial aid available to you because of your situation, location and other deciding factors. Above all, your mortgage lender is there to make sure you are familiar with every step of the entire home buying process, so you are comfortable every step of the way. Utilize the skills of your well-trained mortgage lender, and get approved for a home loan that’s right for you.

If you’re a first time homebuyer, the THDA has a wealth of information regarding homebuyer grants and tax credits that may be of use to you. Also, if you are in an uncertain financial situation, the THDA can assist those in need find homes they can (continue to) afford. The THDA has the most up to date information on the current housing market in Tennessee, as well as new housing legislation and tax credits. If you need information on how to avoid foreclosure, and how to choose a lender, the THDA website has this and much more. Counseling and community programs are also available for those in Tennessee who want to learn more. It’s nice to know you’re not alone. The Tennessee Housing Development Association has continued to work for the state of Tennessee to keep us educated and informed about our personal housing situations. To find out more visit www.THDA.org.

There are several requirements for reverse mortgage eligibility including what the loan money can be spent on, and the specifics of the lien, or legal hold on the property. Also, the reverse mortgage must be the only loan taken out on the home, and the borrower must be at least 62 years old. The process in determining the amount of money loaned includes a detailed appraisal of the house, the age of the senior citizen, and whether the loan will be given in a lump sum, or installments. There are benefits to, and criticisms of reverse mortgages, but for many senior citizens the benefits make a reverse mortgage a helpful option.

Typically speaking, the longer you plan to stay in your home, the more sense it makes to refinance, as you’ll be paying off your home for longer. If you only plan on being in your home for 1-2 years, then refinancing your mortgage may not be the best option for you. Additionally, a new mortgage means new lender fees, which may not be cost effective for everyone. It’s important to speak with a qualified mortgage lender to go over all your options before you make any decisions about your mortgage.