Question by Brian B: How do current mortgage rates help new home builders?
I’d like to buy new construction as a result of the great mortgage rates right now. However, by the time I’d close on my house in December, it could be a totally different ballgame and rates could go through the roof. It seems to me, then, that low mortgage rates only help people refinancing or buying an existing house.
Best answer:
Answer by Danielle M
It dosen’t help homebuilders. Right now nobody is really touching new construction. Theres to much inventory already on the market.
Know better? Leave your own answer in the comments!
Low rates certainly don’t hurt new home builders. What is hurting them are short sales and foreclosures dragging comps down. almost everyone in the market right now is looking for a steal and despite the fact new construction is far cheaper than it used to be, it isn’t in short sale range.
The other factor hurting all purchase mortgages right now, is the difficult qualifying for a mortgage. 100% loans don’t exit anymore and credit even if you do have money to put down, credit minimums with FHA used to 580 but are currently 620.
You can lock an interest if you are really concerned about an increase in rate but it will cost you. You’ll have is to pay what is referred to as a “rate lock” fee- you can find more on that here:
http://www.bankapedia.com/mortgage-encyclopedia/residential-mortgage-terms/313-rate-protection
Best of luck
Most economists predict that interest rates and home mortgage rates will remain low for some time to come. There may be some slight increases later in the year as the economy and the housing market improve but the rates are at record lows and now is the perfect time to buy a new home.
Have you spoken with a lender? It is possible to lock-in a rate for a small fee and thereby guarantee that you will not see substantial increases.