If you are a buyer in Cardiff, Encinitas, Carlsbad, or Vista, you may want to think about moving fast to look for a property while interest rates are still historically low. According to the California Association of Realtors, mortgage rates in 2010 are expected to rise. Early in 2009, the Federal Reserve announced plans to purchase debt and mortgage-backed securities from Fannie Mae and Freddie Mac to help lower interest rates for consumers and spur homebuying. As a result, rates on 30-year fixed rate mortgages fell to the historic lows we are still seeing today. However, the Fed’s asset purchase program is scheduled to expire at the end of the first quarter of 2010, and a lack of private demand for mortgage-backed securities could lead to a rise in rates.
Besides the rise in rates, buyers must also be aware that no-down-payment loans are practically non-existent right now. If not, most lenders require borrowers to put down at least 10 percent, if not more, to secure a loan. These down payments protect the lender and are also beneficial to the buyers. The higher the down payment, the lower the loan amount and the lower the monthly payment.
So, now is the time if you are a buyer who is thinking about buying a property. Interest rates are low, and there is still an $8000 federal tax credit in place for first-time buyers, and a $6500 federal tax credit for move-up buyers. Think about buying now!