Saturday, October 16, 2010

30-Year Mortgage Rates

Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.

At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.

Source: The Wall Street Journal, Nathan Becker (10/15/10)

Richard's Notes:  Appraisers need to wake up and stop appraising homes below market values.  I've seen countless times home-buyers writing offers on homes and the seller taking the best and highest offer only to find out later the house is not appraising for such an amount.

It's important that sellers choose an offer with a buyer who has a decent amount of money down in case the house doesn't appraise.  This deal can still be made because the difference could either be covered by the buyers down payment or the seller can reduce the selling price to help accommodate.  Either way, with a buyer with a reasonable down payment, their can be some level of negotiation. 

When a buyer is only investing the minimum 3.5% FHA loan down payment, if the appraisal doesn't come in at what the buyer is willing to pay for, the lender is NOT going to loan the money.  This is also important for listing agents to price the home accordingly and work with offers that are reasonable.  Taking the market conditions into account, choosing the highest offer is not the smartest choice.

Work with a professional real estate agent in the San Fernando Valley can make the difference between selling your home or listing your home.  You don't want to list your home, you want to sell it, right?

Written by: Richard Johnston, 818-730-4128

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