How Mortgage Rates Compare

You've heard it all across the media. Interest rates are at historic lows. If you are new to the mortgage process, these figures and statements give you little frame of reference.

Let's take a moment to look at where interest rates have been over the last few decades, and what today's rates really mean for homebuyers.

Interest rates are affected by a gamut of factors.

According to the Federal Reserve Bank of New York, "Lower interest rates make it easier for people to borrow in order to buy cars and homes. Purchases of homes, in turn, increase the demand for other items, such as furniture and appliances, thus providing an additional boost to the economy. Lower interest rates mean that consumers spend less on interest costs, leaving them with more of their income to spend on goods and services."

And this is, after all, what you want people to do in a down economy. You want them to reinvigorate the economy with spending.

The Fed continues, "If the rates that consumers and businesses have to pay to borrow rise too rapidly, however, spending may decline, leading to an economic slowdown."

So, it is a intricate dance the powers that be must perform in order to steer the economy the best they can. They, namely the Federal Reserve and Banks, are seeking stable prices, high employment rates, and sustainable growth in the economy.

30 years ago, in 1980, when many first-time home buyers parents were making home purchases, Freddie Mac reports that the 30-year fixed rate mortgage hit a staggering 16.32 percent.

Let's compare that in relation to today's interest rate, averaging around 4.5 percent.

• In the most basic terms, a 30-year fixed-rate mortgage for $100,000 at 16.32 percent, will cost you around $1,450 a month.
• For the same mortgage at a 4.5 percent rate, you'll be paying $580 a month.

The difference is astounding, and this is the main reason the media is shouting news about interest rates. If you are in the position to buy, now could very well be the time.

Paperwork to Keep after Closing

At the end of closing, a large stack of papers sits in front of you. How do you know which ones to file away for future use?

To make your job of sorting through the papers a little easier, here are a few "be sure to save" items.

1. Truth in Lending statement: This handy paperwork helps to summarize the details of your mortgage, including your percentage rate.
2. Insurance: Not only does it serve for proof of coverage, but just in the case you need to make a claim, you will have contact and coverage information on hand.
3. Deed: This paperwork proves that the property has "indeed" been transferred to your ownership.
4. Riders: These are sale contract changes (amendments) that affect you directly.
5. HUD-1 Settlement Statement: This is a great itemized list of your closing costs. It will be especially important for when it comes time to pay income taxes.

Be sure to keep all of your paperwork in an organized filing system and in a fire-proof safe.

For a more in depth list of items to keep, be sure to ask your lender and real estate agent.

Home sales rise in two S. Fla. counties

Sales of existing, single-family homes rose in Miami and West Palm Beach, but slid in Fort Lauderdale in May, according to statistics from Florida Realtors. At the same time, the median sales price in all three counties ticked up.

Existing home sales in Miami rose 22 percent, to 727 in May from 597 a year ago. The median price rose 1 percent, to $196,700 from $194,700.

Existing condo sales in Miami shot up 70 percent, to 972 in May from 571 the year before. But, the median price of a condo in Miami fell 10 percent, to $126,100 from $140,300, according to Florida Realtors’ data.

Existing home sales in Fort Lauderdale fell 6 percent, to 731 from 780 a year earlier. On the upside, the median price of an existing home rose 14 percent, to $216,400 from $190,000.

Condo sales fared better. Sales were up 21 percent in Fort Lauderdale, to 965 from 799 a year earlier. The median price rose 1 percent, to $81,500 from $80,400.

West Palm Beach home sales were up 20 percent, to 887 from 737. The median sales price rose 1 percent, to $235,200 from $232,900. Condo sales in West Palm Beach rose 30 percent, to 877 from 676 a year earlier. However, the median price of an existing condo dipped 7 percent, to $99,600 from $107,500.

Across the state, a variety of housing opportunities continues to be available at attractive prices, while mortgage interest rates remain historically low, according to 2010 Florida Realtors President Wendell Davis.

Statewide, sales of existing homes rose 18 percent in May, with 16,745 homes sold. That was up from 14,172 homes sold in May 2009. Condo sales rose 40 percent, year-over-year, statewide.

The statewide median price of an existing home was $140,400 in May, up $300 from April. The median price of a condo in Florida, however, fell 13 percent, to $98,700 from $113,500 a year ago.

Nationwide, existing home and condo sales fell. Home sales slipped 2.2 percent in May, while condo sales fell 6.8 percent.

The drop may not be bad news. Because of the second homebuyers' tax credit, realtors were trading off sales in the second half of 2010 for sales in the first half, noted Patrick Newport, a U.S. economist with IHS Global Insight. He said the drop implies that payback from the second homebuyers' tax credit will be smaller than that from the first tax credit.

A piece of good news is that prices are increasing nationwide. The median and average prices were both up compared with prices a year earlier. And average prices of single-family homes increased, year-over-year, in all four regions and in 16 of 20 cities surveyed. Rising home prices will reduce the number of homes that will fall into foreclosure, Newport noted in a news release.

Two Properties Closed

We are pleased to announce that we have closed two more properties! 7350 SW 89th St, Unit 315-S, Miami, FL 33156 & Address: 6270 SW 156th Ct, Miami, FL 33193.

New Listing

Address: 7350 SW 89th St, Unit 315-S, Miami, FL 33156

Listing Price: $1,250/Month Furnished

Property Type: Condominium

1 Bed, 1 Bath, 690 Sq. Ft