The effects of the 2008 Mortgage Crisis are still being felt
as home sales are once again struggling. The $8,000 first time homebuyer tax
credit implemented by President Obama’s administration had its desired effect;
many Americans took advantage and purchased new homes. Now that it has expired home
loan purchasing rates are down almost 40% from where they were a year ago. In
fact, mortgage refinances are currently making up over 80% of all mortgage
activity.
In the meantime, the country is experiencing historically
low interest rates (around 4.25%) for 30 year fixed home mortgages. Many
homeowners can save a significant amount by refinancing their home mortgage loan.
Though home refinancing rates are incredibly low, not all
homeowners can benefit from refinancing. A good credit score, home equity and a
low debt
to income ratio are necessary to take advantage of these low rates. If you
are in good standing with these qualifications, do your research and shop
around, it is very possible that you could be saving large sums of money in
mortgage payments.
Experts claim that unemployment, underemployment and
distrust in the current economy are the main factors impeding home sales. The
amount of people refinancing does pull more money into the industry, and this
is a good sign. Though home sales have been stagnant across the country,
Boston, Minneapolis and San Francisco
are still seeing increases. However, the experts believe another homebuyer tax
credit or similar stimulus plan will be necessary to kick-start the home buying
market.