Refinancing is Popular When Rates are Low

With home loan and lending rates at historic lows, now is the best time to borrow money to make investments that you have always wanted to make but have been waiting for the right time.

Lending rates are at their lowest since 1961, and aren’t likely to be this low ever again.

Although irresponsible lending and borrowing was one of the causes of the economic breakdown in 2008, borrowing is now one of the best options for those who are looking to make investments that will pay off in the future. The Federal Reserve has announced that they plan to keep interest rates as low as possible through the year 2014, but this does not mean that they will stay down as far as they are now. Rates are almost certain to go up over the next few years, making now the best time to borrow money if you are considering it. Here are three great ways to take advantage of low rates. 

  1. Buy a home, rental property, or second home. With home loan rates as low as they have been in history, there has never been a better time to buy than right now. Loan rates have been cut almost in half since the economic crash, and lenders are pulling out all the stops to make it as easy as possible for buyers to get into the home of their dreams. Little or no money down up front, low interest rates, and low or no closing fees once everything has been said and done are just a few of the ways that lenders are trying to get people to buy in this down economy. If you have the extra income, now is the best time to buy additional properties and use them as rentals or vacation homes. Prices are starting to rise back up, and home values are only going to increase as the housing market is on the mend. If you want to buy, do it now.
  2. Refinancing your home is another great option to help you take advantage of low rates. If you bought a home before 2008, you are likely paying an interest rate that is much higher than what is being offered to home buyers now. If you have a rate that is about 4%, you can contact your lender and ask about their various refinancing programs. For example the HARP refinance program is popular as well as . Look for streamline refinance options, as these are very cheap and quick and will help you start saving hundreds of dollars right away.
  3. Improving your home is one of the other ways that you can take advantage of low rates and still make a profit on your investment. Borrowing money on a home improvement loan is a great way to get a low rate and add value to your home. Consider remodeling the kitchen, adding another bedroom or bathroom, or finishing the basement and adding hardwood floors. All of these improvements can be funded with a home improvement loan and will add significant value to your home if you ever want to sell.

With the low rates that are available now, there has never been a better time to borrow and make your financial dreams a reality. Be sure to shop around with different lenders (and make sure they are FHA and HUD approved because that is a popular loan option) to make sure you are getting the best rates. Start looking for the best rate in your area today with one of our loan officers who is waiting to help you.

Green Homes: Harder To Refinance?

Building a home with “green” materials is becoming more popular. But be careful when building a home using green materials or remodeling your home using green materials — it may make it more difficult to refinance when it comes time to refinance.

According to a story in the Wall Street Journal, at least one couple is having this problem:

Getting financing for unusual homes has never been easy. Near Granby, Colo., Richard Messer opted not to look for a conventional mortgage because there was nothing conventional about what’s inside his walls: 50 tons of paper Coors beer packaging used as insulation. Mr. Messer got a $60,000 loan from friends to help pay for it. “The problem for anyone trying to do a unique house is financing,” he says.

Wayne Bryant, a 56-year-old steamfitter, spent much of last year looking for a way to refinance a $417,000 construction loan on his underground house high in the San Juan Mountains in southwest Colorado. The first appraiser to examine his property didn’t even come down from Denver to look at it, saying he had made a few phone calls and determined that there were no comparable transactions in the area, Mr. Bryant says.

No matter what state you live in, one thing to consider when using “green” or recycled products to build your home is “how will this impact my ability to finance this house”?

As the credit crisis drags on and banks are picky about who they are lending money to, one thing is certain:  Owners of odd homes can be out of luck.

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