Interest rates are on the rise for a variety of reasons including the Feds no longer purchasing bonds to keep rates low.
Home prices are increasing in many areas. If you read our blog post yesterday, home prices are almost back to normal in areas where job numbers are on the rise.
Why 2014 Is The Year to Get Out of Debt
When it comes to your personal finances, 2014 may be your best chance to take advantage of low interest rates and get out of debt — before it really starts costing you. The prime rate has stayed at 3.25% since 2008 and isn’t expected to move higher in 2014. Prime impacts credit cards, auto loans, student loans, and many other common interest rates.
Keith Gumbinger, vice president at HSH.com believes mortgage interest rates could go over 5% this year. But the other interest rates will be more stable, so now is the time to tackle paying off those old balances.
7 Reasons Not To Pay Off Your Mortgage Before You Retire
Forbes published an interesting, almost contrarian, article on why you may want to consider not paying off your mortgage before you retire.
- You have high interest rate debt
- You aren’t maxing out your retirement savings
- You are getting a tax break on the mortgage interest
- Your assets are in retirement plans
- You might need funds to tap into
- There is a chance you may move
- You are earning a decent rate on your funds
Read the article for more in depth information. The bottom line is ensure that you’re paying off high interest rate debt, saving enough, and consider your future. If you need the extra cash, hang onto it rather then putting it into the home.
What It Means to Be ‘Pre-Approved’ for a Mortgage
To be pre-approved for a mortgage means that a bank or lender has investigated your credit history and determined that you would be a suitable candidate for a mortgage. Often there’s a time limit involved as to how long you would be pre-approved.
Getting pre-approved is a lengthier process than getting pre-qualified. However, at the end of the pre-approval process, you should have an exact amount that you could get as well as an interest rate. Getting pre-qualified doesn’t guarantee anything, and only provides a rough range.
Talk with your reputable loan officer about what you would need to do to pre-qualify and get pre-approved. They have a great number of resources and types of loans to choose from, and can help you find the one best suited to your needs and goals.