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Magic Ball, When
Will Mortgage Rates Fall?
Wouldn't it be nice if we could just get out our magic ball
and see when mortgage rates were going to fall?
Unfortunately, the technology to do that just hasn't been
developed yet, so in the meantime we have to rely on doing our
homework to get the best mortgage deal possible and lock in
rates that don't leave us wishing we had acted sooner.
So even though we don't have a magic ball, there is ways to
keep your mortgage rates down and take advantage of the
market.
First, don't get greedy. Mortgage rates fluctuate,
often day by day. When you are thinking about
refinancing or taking out a new mortgage new keep an eye on
the market and know where things are headed. When you
see a low rate, lock it in and don't hold out thinking that
"if I can just wait one more day…". Often that day never
comes and you are left with a rate than can be as much as a
full percentage point higher! The golden rule:
don't be greedy!
Next, crack open that nest egg that you've had set aside
for a rainy day and buy into the equity in your home.
The more you put towards the down payment, or into your
equity, the lower your rate will be and (as an added benefit)
the less you will pay in interest over the years no matter
what your rate is. One of the single best things you can
do to save money in the long run when it comes to your
mortgage is to get your equity built up in the
beginning. Don't strain yourself financially, but don't
keep your piggy bank tucked away for a rainy day - because you
can buy a lot of umbrellas with the money you are going to
save!
Negotiate, negotiate, negotiate. A lot of people
think that when they sign their mortgage notes that what is
written down is set in stone. Mortgages are just like
buying a car - you have plenty of room to negotiate on rates,
fees and other costs. Shop around and play hardball -
after all, it is your money we are talking about here!
Take advantage of the buyer's market out there and ask your
seller to pony up some of the closing, inspection and other
costs. Some seller's will even purchase points for you -
and it never hurts to ask. Whenever there is a glut of
housing on the market a savvy buyer can take advantage of it
by getting a lot of the costs taken care of by the seller,
thus leaving him or her with more money to throw towards the
down payment! Another win-win situation!
Finally, know when to hold 'em and know when to fold
'em. Once you get a good rate with minimal fees, lock it
in and forget about it. Sure, you could have saved
another $100, but in the meantime interest rates went up 0.25%
-- So much for that $100 savings!
So put away the magic ball and instead work on your
negotiating and financial skills. You may find that you
don't need a magic ball after all, you just need a bit of
mortgage know-how to get a rate and a note that you can
benefit from for years to come.
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