It has been an interesting couple of weeks from an interest rate perspective. Last week, rates fell to their lowest level since 1971. One would think that would cause a new frenzy of eager homeowner's looking to refinance yet the turn out has been fairly lackluster. The MBA reports an uptick in refinance applications but the number is not where one would think it should be.
There are a lot of things that are likely behind the disappointing "increase" in applications - a lot of realistic things. But there is also a fairly large group of people that aren't exploring their options for the wrong reasons. I hear from many people that they have not bothered to look into refinancing as they just "know" it won't work due to home values or other assumptions. It still takes me by surprise when someone responds that way but has yet to speak with a professional about what options they have.
If you are a homeowner or are striving to be one, now is the time to step up and take some actions! Get a Second Opinion from a mortgage professional if you currently own your home. If you are hoping to be in the market to purchase a home, get in front of a mortgage professional right away to see what your options are . . . make sure you truly understand them as well!
At GHM, it is our mission to educate. We want all our clients to be informed and to take advantage of the services we offer them . . . services that come at no cost! It is time to put your financial house in order - this rate environment will not last. Do you really want to be kicking yourself when this rate boom is over for not taking the time to explore your options well it was here?!
Thursday, August 25, 2011
Tuesday, August 2, 2011
Debt Ceilings, Defaults, Downgrades . . .Oh My!
It has been quite a week in the financial markets. We have narrowly sidestepped a federal default with no guarantee that we will hold our pristine AAA credit rating. Political positioning has been off the charts and faith in our esteemed leaders has dwindled. Everywhere you look there is speculation on the effects of a default and downgrade - that alone is enough to make even the most seasoned Financial Professional a bit weary.
All of this is very real. There are serious implications that come with a gamble this large. This debate and deficit cut has barely even started at this point. S&P warned of a possible downgrade if deficits weren't cut by $4 trillion . . . we have all been waiting with baited breath for our lawmakers to strike a deal only to find out that the agreed upon cuts only added up to about $2.4 trillion. Hmmmmmm . . .
So we have avoided the default but we still face a possible downgrade which could likely be just as catastrophic as a default! I can only hope at this point that we can hold our AAA rating and continue to limp towards an economic recovery. I think party politics aside that is what we all want! Getting to that recovery is our challenge. Consumer spending has fallen once again showing that the average person does not harbor much faith in our economy. Without consumer confidence we as a nation are basically held hostage. Government cannot fix the state of our economy, the private sector has to.
One of the ways to work ourselves out of our "housing crisis" and make some real headway is to actually start buying houses. Novel idea, right? With all the media hype on crisis after crisis, the average person looking to buy is a bit gun shy. What I wish all the media hype would cover is the fact that now still is a great time to buy. How many of us can say that we don't think 4.5% is a good rate for 30 year fixed rate money? I don't think anyone that was buying a home during the 80's or 90's would argue that 4.5% is a great rate . . . not when average interest rates back then were anywhere between 8-18%! Hard to believe that people actually held a mortgage with a rate of 18%, isn't it? We have almost gotten spoiled with our awesome run of historically low interest rates!
We all need shelter. A home is typically one's largest investment, yet it is also a necessity. When we look at our home purchase as a necessity providing the shelter we need, where do we really go wrong? If you can qualify and provide the necessary down payment - more often than not you will be better off buying than renting. Bottom line - those in a position to buy should take a long hard look at pulling the ripcord and actually taking the leap into homeownership.
All of this is very real. There are serious implications that come with a gamble this large. This debate and deficit cut has barely even started at this point. S&P warned of a possible downgrade if deficits weren't cut by $4 trillion . . . we have all been waiting with baited breath for our lawmakers to strike a deal only to find out that the agreed upon cuts only added up to about $2.4 trillion. Hmmmmmm . . .
So we have avoided the default but we still face a possible downgrade which could likely be just as catastrophic as a default! I can only hope at this point that we can hold our AAA rating and continue to limp towards an economic recovery. I think party politics aside that is what we all want! Getting to that recovery is our challenge. Consumer spending has fallen once again showing that the average person does not harbor much faith in our economy. Without consumer confidence we as a nation are basically held hostage. Government cannot fix the state of our economy, the private sector has to.
One of the ways to work ourselves out of our "housing crisis" and make some real headway is to actually start buying houses. Novel idea, right? With all the media hype on crisis after crisis, the average person looking to buy is a bit gun shy. What I wish all the media hype would cover is the fact that now still is a great time to buy. How many of us can say that we don't think 4.5% is a good rate for 30 year fixed rate money? I don't think anyone that was buying a home during the 80's or 90's would argue that 4.5% is a great rate . . . not when average interest rates back then were anywhere between 8-18%! Hard to believe that people actually held a mortgage with a rate of 18%, isn't it? We have almost gotten spoiled with our awesome run of historically low interest rates!
We all need shelter. A home is typically one's largest investment, yet it is also a necessity. When we look at our home purchase as a necessity providing the shelter we need, where do we really go wrong? If you can qualify and provide the necessary down payment - more often than not you will be better off buying than renting. Bottom line - those in a position to buy should take a long hard look at pulling the ripcord and actually taking the leap into homeownership.
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