Real Estate in Northeast Florida and Around the World

This week has brought about a wild and crazy ride in the financial world.  Volatile for sure, the instability of the markets has left many feeling a little queazy.

One of the bright spots is on the home financing rates.  The rate for a 15 year conventional fixed rate is below 4% as of yesterday afternoon with no discount points.  The 30 year fixed rate for a home loan was just a little above 4%.  This is incredible. 

If you have not purchased a home yet, you best get cracking.  Inventories are shrinking - despite what you are hearing on the news.  Remember, real estate is local, not national, and the national media doesn't have a clue what is happening in Northeast Florida.  To be able to buy in this interest rate environment, when prices are at their lowest - well, it is hard to say that times will get much better for doing this.

If you currently have a home loan, you may want to call a lender and inquire to refinance - you might save a few pennies in doing so.  You will want to compare the costs of refinancing against your savings.  Here's a quick tip - determine what the costs to refinance will be, and divide the monthly savings into the closing costs.  This is the number of months it will take you to recoup your refinance costs.  If you don't think you will keep the home beyond those number of months, then you are better off not to refinance.  For example, if your closing costs to refinance will be $4,000, and the different in your old principal and interest payment compared to your new payment is $150 per month, $4,000 ÷ $150 = 26.67.  It will take over 2 years to recoup that $4,000.  But if you intend to keep your property for longer than 27 months, the $150 a month becomes true cash savings after that.

Be sure to compare lender's rates and terms, and compare the same product (do not compare an adjustable rate mortgage to a fixed rate mortgage). 

Whether you are buying a home or refinancing, to ignore these historically low mortgage rates and purchase prices would be a shame.