Q & A with Dottie Herman

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Q1 - I just bought a home about a year and a half ago, but the rates have significantly come down since I bought my home. We are at 6.25 for a 30 year fixed, does it make sense for me to refinance? We have excellent credit and have been on time with every payment thus far.

A - If your loan amount is below $729,000 the answer is YES.  As I am writing this in May of 2010 the fixed rate 30 year is the low 5% range.  If your loan amount is higher you may want to consider an intermediate Adjustable rate loan, these loans have fixed rate payment for a set period of time usually 5, 7, or 10 years based on 30 years but with lower interest rates.  These loans are in the Low 5% range as well and are a great option if you plan to be in the home less than the initial term of the loan.

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Q2 - I recently went to contract on a home, however, then my husband lost his job. We clearly no longer qualify to purchase this home- so do we get our deposit back and can we get out of this transaction?

A - It is best to speak with your attorney on this first as each purchase transaction varies in its terms. Most contracts have what is called a mortgage contingency meaning that if you cannot secure financing by a specified time you will be released for the obligation to purchase the home, so if you cannot get a mortgage loan due to the loss of your husband's job then you should be released under the common contract requirements.

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Q3 - My wife and I are looking to buy a home- we were just quoted 6 percent for a 30 year fixed by the bank we currently use. Our friends just got 5.75 for a 30 year at a different bank. How can we get that same rate? Do we have to use a different bank? Why isn't the rate universal for all lenders?

A - Rates among lenders are normally within a rather close range to each other.  The most common factors that can cause a rate to be different are the type of loan, the competitiveness of the lender, your credit score, the amount of down payment, and property type. These items can mean as much as a 1/2% difference in rate for the same loan at the same lender.  So it is possible that you may be looking for the same type of loan but have different transaction characteristics.

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Q4 - My home is on the market- we have had decent open house traffic and showings but no offers yet. My wife insists on staying home for open houses, while I want to leave as I think it makes buyers uncomfortable. Should homeowners be home during an open house?

A - Unless it can't be avoided, it is highly recommended that the owners not be present during open houses. When buyers see an owner present they become more inhibited in their comments and actions.  You want buyers to feel the exact opposite when they walk through the home.  With a real estate expert present who can answer all buyer questions, there is no need for an owner to be there.  

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best.

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