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It seems like the media coverage of mortgage activity is saying something different every week!  Today’s major headlines included: Mortgage rates drop to a record low, Mortgage applications surge, yet contrasting headlines discussed slowdowns such as Mortgage applications dipped as consumers awaited Fed just a few days prior.  With so many ups and downs in the assessment of the mortgage market, what should a homeowner do?

Buy? Sell? Refinance?

Thinking about all the options is enough to make you sick to your stomach!

Here are a few simple tips to help clear the confusion:

Should I Buy?

Interest rates are most certainly at historical lows.   Coupled with slumping home prices in many market,  for a home buyer who’s in the market and ready to acquire a home.  Assess your financial scenario and plan your home purchase logically,  responsibly, and please seek professional advice from a Realtor, Financial Advisor, or Loan Officer (all of which can be found in our Top Voices Area).  Don’t forget to consult your friends & family before making a big decision.  But in my opinion, all signs point to some great deals in the market right now!

Should I Sell?

With rates at the current levels, it makes homes more affordable for someone who can qualify for a property.  This means more people can potentially purchase your home, thus making the task of selling your home just a little bit easier and hopefully letting you keep your asking price at a level you believe it should be (with the right research of course).  When most people sell a home, it typically means they will be buying a new home, and again the signs point to great deals in the market right now.

Should I Refinance?

Not looking to start packing boxes anytime soon?  No worries, the low rates have created a great opportunity to further solidify nesting grounds with a lower monthly payment, often with little or no out of pocket expense!  But do your homework, there are thousands of mortgage lenders out there, and it can be tough to find the right one.  Start with your friends and family, someone who’s had great service and a good deal recently.  It’s important that the transaction was recent, because many loan officers change brokerages often, meaning processes and investor relationships may change, which could affect the experience as a whole.

 Here are some quick tips to compare mortgage quotes:

1.  Looking at your Good Faith Estimate, compare the 800 section (these are the fees directly associated with the lender) and the interest rate on the loan of each lender. These are the two primary sections that a lender controls, the rest are third party fees (title, insurance, taxes) that will most likely be the same regardless of which lender you use.  Just total the fees, and compare the rates side by side, this will give the best way to compare.

2.  Make sure every lender you speak to has a full understanding of your financial scenario; many factors can affect fees and rates drastically.  Things like being self employed vs. salaried, where your down payment is coming from, and your debt CAN really make a rate quote change.  Be thorough and complete when supplying your information as this will help avoid any unwanted surprises.

3. Get it in writing! An honorable mortgage lender WILL guarantee an interest rate and their fees (sometimes subject to specific conditions), and they will do so in writing.  Ask for it, especially in the beginning of the process so there is no confusion as to what you’re getting and how much it will cost.  Don’t confuse a good faith estimate as a guarantee, the title itself says “ESTIMATE” and thus is not a binding document.  However a written “rate lock agreement” or similar document that states clearly that an interest rate has been secured is a better way of assuring the deal is legitimate.

As always I recommend consulting experts in the industry when making a decision as large as this, most often the biggest transaction of your life.  There are many VERY good and reputable people in the industry, many of which use our Trulia Voices platform to help thousands of people every day, if you ever have a question just ask! When making a decision on your home, all we ask is be cautious, be careful, and be smart!

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