Don’t Wait to Buy or Sell a Home, Rates are Going Up!

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The effect of the Fed exiting from their program of buying mortgage backed securities on March 31 this year will have a major impact on housing market prices. The elimination of the major purchase of mortgage backed securities is a precursor to HIGHER RATES….likely in a quick and dramatic fashion, and it is normal for mortgage rates to go up when The Fed lowers rates.  
The cost of a home has two major components: the price and the expense of the financing. Unless you are paying cash for the house, the mortgage interest rate is a key determining factor in what the home will cost you over the term of the loan. 
Right now a 30 year fixed rate mortgage can be obtained for around 5% interest rate. This is very low, and half of what interest rates were just 10 years ago. If you are a seller who wants to move up to a more expensive home in a down market, now could be the best time. The longer you wait to sell, the lower the price of your home could fall. On the other hand, if you are a first-time home buyer, it is in your best interests to purchase your home as soon as possible. The first-time home buyer tax credit will be expiring in June, and any increase in interest rates after the government’s exit from the mortgage industry in March will greatly affect your purchasing power.

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*BIG NEWS ON SHORT SALES*

A major problem the Atlanta real estate market currently faces is the growing number of bank-owned homes clogging the market. While the banks take their time processing paperwork and checking comps, the homes sit vacant for months. During this time, homes are vandalized/stripped of all or most …valuables. The preferred items are copper piping in air conditioning compressors and also plumbing equipment. Once these items are removed, the home will no longer qualify for conventional financing. Only cash offers or investor backed financing can take place. Another negative aspect of short sales is the extended period of time buyers have to wait upon submitting an offer. 4 to 6 weeks is the usual, but a 3 month wait is not out of the norm. But enough of the complaining already because a new rule issued by the Treasury recently will require lenders to respond to short sale offers within 10 business DAYS! The rule also makes up to $1,500 available to the seller for moving expenses and can possibly release the seller from any other liability.

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