If someone in Real Eatate, a loan officer wrote this what in the world does this mean for buying a house??????

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The good news is that rates early this week hit the lowest point since mid 2005 with 30 year fixed rates to be had for under 6 Percent. This is huge, as over the last 50 years there are very few times that rates have dropped to this level. I can still remember fixed rates in the 80’s of over 15 Percent. What do you think that would do to your housing expense and disposable income?
The employment numbers which were released this morning were much more positive than anticipated. This has put pressure on mortgage backed securities causing their yield to rise. This movement has increased rates a little, but still leaving us with historically low home mortgage interest rates. The 10-year bond is currently up 20 basis points from Monday of this week, trading at 4.08 Percent -up from 3.88 Percent. Our feeling is that despite the market gyrations we will enjoy these favorable rates over the near term, making this a great time to purchase or refinance.

We bought our first home in November of 2006, so I am slightly confused and new to all of this. But we have two separate loans and got both 1098. So it says the interest amount then it lists the points as “0”. Does that mean we didn;t pay enought or what?? Before when we were renting we could claim all of the rent we paid and now we have a mortgage which is more than the rent and we can not claim anything that we paid??!! I don’t get it. Please help.

  1. Reply
    February 10, 2011 at 4:33 pm

    They’re just telling you that interest rates are low and its a good time to buy a house.

  2. Reply
    Jack Meehoff
    February 10, 2011 at 4:56 pm

    favorable rates + price deflation = great time to buy! If you have superior credit, that is, and if you are not in a position where you are forced to sell your current house to move.

    The banks have tightened up credit standards to the point where you have to be a reallllllly good credit risk to get approved.

  3. Reply
    February 10, 2011 at 5:10 pm

    they are basically saying the interests rates are incredibly low, but the employment numbers released look promising, though because of the economy they think that these interest rates are going to be around for a little while, it’s no guarantee and this is the time to strike on the real estate for the best interest rate for mortgage or refinancing.

  4. Reply
    Yvette V
    February 10, 2011 at 5:58 pm

    The interest rate is low compared to as in the past. It talks about employment, since employment means people are able to perhaps pay bills etc… thus changing the economy, therefore changing real estate slowly since it is slow in adjusting to the economy. In other words, is a great time to buy real estate before rates increase!

  5. Reply
    February 10, 2011 at 6:15 pm

    First, the market does not “gyrate.” It fluctuates though.

    What this means is what it usually means. Lower interest rates mean that if you buy and house and if you get a loan to do that, you will pay less once it is all said and done.

    Lower interest rates equal lower monthly payments.

    BUT you must watch out for closing costs and other associated factors. If you are paying four points, that is four percent of your loan amount, up front. So you can think of it as that first payment will be at 10 percent instead of 6, using your example.

  6. Reply
    Fabio G
    February 10, 2011 at 6:51 pm

    they are telling you they need loans because rates are low but no one is qualifing for loans so they are desperate make your own decision when you are ready

  7. Reply
    February 10, 2011 at 6:59 pm

    Points are kind of like a fee you pay up front when purchasing a home to get a lower interest rate. Basically, it is prepaid interest. Not everyone pays points when purchasing a home, but if you did, you could have deducted that on your 2006 taxes, NOT 2007. Only your monthly mortgage interest and property taxes are deductible at this point.

    I don’t know how you got away with claming “all your rent” previously. I can see part of it if you ran a business out of your home, but something doesn’t sound right.

  8. Reply
    Chris L.
    February 10, 2011 at 7:24 pm

    You can deduct the interest paid and real estate taxes paid. Points are paid up front to lower your interest rate and would have been claimed in 2006 if you paid any. You cannot claim rent on a personal residence so I don’t know what that is about, that is why it is beneficial to own a home.

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