Take Advantage of Record Low Rates Before They Rise
Low interest rates, as we all know, are making history. Last week, according to an article found on CNNMoney, “rates on both the 30-year and 15-year fixed loans fell to new records, at 3.89% and 3.16%, respectively, according to Freddie Mac.” The question, though, is how long will prospective buyers enjoy such low rates?
Even with these rates, sales are still sluggish, with the market flooded with family homes and investment properties. Doug Duncan, chief economist for Fannie Mae, suggests that “low and declining interest rates may cause homebuyers to hesitate: They may expect them to fall even further. On the other hand, rising rates, which often accompany an improving economy, can give potential homebuyers a reason to act -- before rates and prices become less affordable.”
Potential buyers sitting on the fence waiting for the rates to go lower may be getting their reason to act: a recent action by Congress may be pushing those rates higher shortly. According to CNNMoney, “to pay for the extension of payroll tax cuts, Congress mandated an increase in fees for Fannie Mae and Freddie Mac loans. That could mean an increase in upfront costs for borrowers of about half a point, starting April 1. The new fee would add $500 for every $100,000 in principal.” Instead of an additional upfront fee, “borrowers could pay the fee as a higher interest rate, [adding] an additional one-eighth of a point to their rate,” according to Keith Gumbinger of HSH Associates. That amount might seem inconsequential, but when added to a $250,000 mortgage, the mortgagee could be paying approximately $225 more per year.
Andrea Szlavik of Prudential Fox and Roach in Collegeville states that “with a market filled with desirable listings, interest rates at historic lows, and a threat of rising rates, prospective buyers would benefit from getting off the fence and jumping into the present day ‘buyers’ market.’” Szlavik is both a Broker and an Agent with a host of prestigious awards and an abundance of experience handling various Real Estate transactions. Szlavik will guide the perspective buyer through the entire process, from mortgage qualification to home searching to settlement of a new home or investment property. Szlavik also has experience with Relocations and Rentals. She can be reached by calling 610-420-8353; through email at a2zRealtor@aol.com; or visit her website at www.a2zRealtorPA.com.

Prudential Fox & Roach, REALTORS®, the nation’s fifth largest provider of total home services in the United States, is an independently owned and operated member of the Prudential Real Estate Affiliate, Inc. (PREA), the largest Prudential affiliate in the PREA network and the largest broker in the country operating in a single market. As the Tri-State area’s real estate leader, the company has more than 60 sales locations and 3800 associates. Through its affiliate, the Trident Group, the company provides one-stop shopping and facilitated services to its clients including mortgage financing and title, property and casualty insurance. Visit our Website at www.prufoxroach.com.