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Missing the tax credit deadline might have seemed like a big mistake to some home buyers, but waiting could have been the smartest thing to do. Rates have fallen so dramatically since April 30th that the typical purchaser of a $350,000 home, financed with a $280,000 loan, would have saved a bundle by waiting until May. At April’s average rate of 5.34 percent, a home buyer would have locked in a 30-year fixed rate with a payment of $1,561.82. The same borrower could have snagged a 30-year fixed rate at a rate of 4.625 percent in May and paid $1,439.59 per month. That’s a $1,467 annual savings. Over 30 years, it’s a $44,003 savings, dwarfing the tax credit. Borrowers eager to lock in a very low-rate fixed should apply quickly, says Bankrate.com analyst Holden Lewis. Rates haven’t been this low since the 1950s, he says, adding that rates are unlikely to fall further. “You can float, but that's not a smart strategy. It's like asking for another ca rd when you have 19 in blackjack. Stand and take your chances,” he advises. Sources: Bankrate.com and Informa Research Services
Posted by Aaron Walker on June 3rd, 2010 7:30 AMPost a Comment (0)
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