Friday, December 26, 2008

"I Remember When Mortgage Rates Were So Low, That..."

That's how the conversation will begin when you're sitting in your rocking chair, grandkids at your feet, being asked what life was like in 2008/2009. You'll go on to say how you saved X amount of money because you had the foresight to lock in an historically low rate. And they'll be impressed.

Okay, so maybe that won't impress any of the kids. And the story may include recollections of how the stock market dropped 40% that year and World Market filled your inbox with "Up To 75% OFF!" emails.

But here's my point:

30 year fixed mortgage rates are currently in the 5% range, a level that hasn't been seen since 1971, the year Freddie Mac began it's weekly rate survey. It's a once-in-a-generation type of thing.

Of course this doesn't mean you should go out and get a mortgage loan at all costs. No mortgage rate is worth making yourself worse-off. But those who are in the market for a home or anyone who could significantly reduce their current monthly mortgage payment should seriously consider pulling the trigger on a new home loan or refinance. Sure, not everyone can take advantage of these rates - credit issues, no downpayment, NO INCOME. Yet there are many who can, and it's not hard to find out by calling your loan officer.

Yeah, there's a conflict of interest in me saying all this (I'm "talking my book"). After all, I make a living originating mortgage loans. But it doesn't take a rocket scientist to figure out that jumping on these low rates could save you money. And I believe I would be remiss not to inform those around me (clients, readers, etc). In fact, it was a conversation I had on Christmas Eve in St. Louis, MO while visiting family that encouraged me to do this post. While chatting about work life, a friend admitted he didn't follow economic/business news and had no idea what was going on with mortgage rates. There are many I've run into who are in the same boat.

Contact your financial advisor. Talk with one (or several) of the many reputable mortgage professionals here in town. Get quotes and crunch some numbers. Call a local Realtor if you're thinking of buying. And seriously consider making a move if it fits your situation/goals/wants/needs.

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