You will “hear” lower numbers when watching late night TV. And if you are a Military Veteran – you will hear lower numbers still on late night TV and during primetime radio broadcasts.
A .25% increase in interest rates will get $500,000.00 buyer approximately 25k less in borrowing power. Depending on their particular credit profile.
We do not have an overabundance of real estate inventory on the market for sale. If we did we might have been able to see this interest rate increase impact the current for sale market. Causing the Santa Clarita real estate market to start to reduce in price.
That isn’t going to happen because Santa Clarita is very much in a home seller’s market. SCV home sellers have the advantage, currently. Santa Clarita home buyers are wanting to buy real estate, but are having a hard time finding “the one”.
One word of Warning:
The reason for this is simple. If you have not bought a home before, you are in for a treat. Today, versus the past, the lending guidelines are tighter than ever.
There are double and triple checks on every single part of the loan process.
They, the powers that be, will reach out to your employer multiple times throughout the process, to verify you are employed.
There are others involved that are only “monitoring” that everything has been done correctly. They are paid to find problems with the loan package.
While there are these fail-safes for those who are borrowing money to buy a home. The Bait and Switch are alive and well.
Bait and Switch
I said 4.25% – that depends on your credit profile. If you have horrible credit, that is going to cause that rate to increase, or be the reason you are denied all together for a home loan.
If you have stellar credit, you may find a lender who can make the “going interest rate” a bit lower if you insist you’ll take your business to someone else who can.
Veterans – unfortunately, just like when I was with the Police Department, we were a target rich environment, to real estate lenders.
Not only with the “origination” of a home loan, when buying real estate, but with the Almighty RE-FI, refinance, also.
The VA, Veterans Administration, loan lenders do well on the commission side with each VA loan issued.
Some Lenders, so hence the “be careful” will advertise that is called a “teaser” rate to get their hooks into you.
Back it up!
When you hear something that is “too good” to be true, ask for it to be backed up in writing.
Have the person telling you that they have the BESTEST rate in the whole wide world and they are going to give it to you, back up what they are saying in writing.
You will see the brake lights come on and they will start providing excuses as to why they cannot put what they are saying in writing.
- my company won’t allow it, but trust me!
- we have an agreement with the lending institution not to – but trust me!
- I cannot put it in writing, but I haven’t been in business for 20 years lying to people! (this one always gets me – C-Below)
Why it “Gets Me”
I used to think, while in a real estate transaction when engaging with the agent representing the other party, what a disservice they were giving their client.
Against the law or Realtor code of ethics, I am able to report those issues. But when you just know there is smoke, but cannot prove the fire, that is infuriating.
To back up a statement based on past occurrences against their fellow man and the failure of them to “report”, that is ridiculous.