5 Questions to ask before you purchase a home!

The following 5 questions may help you decide if right now is the time to buy a home.

Questions & Answers:

#1) Why are rates so low?

Since early January, the Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac & Ginnie Mae in an effort to stabilize the housing market. The bank plans on purchasing $1.25 trillion of securities allowing rate to be more affordable to consumers.

#2) Are rates expected to stay this low?

It's hard to tell, but don't count on it because lending landscape is likely to change next year. The Fed said it would wind down the purchase program by March 30, 2010.

#3) Why do different mortgage surveys come up with different average interest rates?

It depends on which lenders are in their sample, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Some surveys take points paid by the buyer to the lender into consideration.

#4) What else does the consumer need to know?

The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. The lowest down program is FHA with 3.5% still comparable to a 30 years fixed!

#5) So is now the best time to buy a home?

It all depends on personal situations. Home buyers certainly have a lot of factors working in their favor right now - low interest rates, plenty of marked-down homes for sale and an extended and expanded federal tax credit that will expire in spring.

THE REAL ANSWER! If you can afford the monthly payment and have the ability to put down at least 3.5%. NOW would be the time to buy. Are you willing to bet that even if home prices continue to fall that interest rates will continue to remain the same? *We have seen home prices rise in San Francisco and the Bay Area over the past 6 months. You be the judge!