For ten weeks in a row, interest rates for a 30 year fixed rate home mortgage have been hovering at the lowest point in decades. There has, consequently, been a jump in the number of consumers applying for a new mortgage. The percentage of applications that are approved, however, is not as high as it was prior to the credit crisis. Banks are requiring that borrowers meet more rigid requirements. In many cases, borrowers need a credit score of at least 720 to qualify for the lowest rate home mortgages. 20 percent equity in a current home or a 20 percent down payment are becoming the norm to be eligible for a new mortgage. Those who do not meet the criteria can often still obtain a home mortgage, but at a higher interest rate and with a requirement to purchase home mortgage insurance. Some consumers have decided to stay out of the real estate market until it steadies. Many fear home values are not yet at their bottom. Other consumers are just not comfortable taking on the burden of a home mortgage when the economy is in such a rocky state. Real estate columnists are abuzz with the idea of renting versus owning. The decision is an individual one that should be dictated by your own financial and personal goals.
Anticipating the length of time you plan to live in the property is an important first step when deciding whether to take on a home mortgage or become a tenant. The bulk of payments made on a home mortgage the first handful of years is heavily weighted toward paying interest, rather than equity. There are added costs of buying a home, such as attorney and bank fees for closing, appraisals, inspections and title fees. If you plan to move and sell the house in two years, then renting might make more sense financially. Rent offers no tax benefits, but you can deduct home mortgage interest payments. In many markets, though, rent is not on par with house prices. In those markets, your monthly payment for rent would be considerably less than what you would pay in mortgage payments for living in the same property. You can invest the money you saved by not having a big home mortgage payment and you might come out ahead in the long run. Being a homeowner instead of a tenant has some psychological components, as well. As a renter, you would not be able to make changes to the property like you would if you owned it. As a tenant, you may also have to move out at the end of the term on your lease. You may have the responsibility of a home mortgage as a homeowner, but you also have pride of ownership and will build equity while you have a roof over your head.
It is unclear if home mortgage rates will continue to decrease or will slowly make their way up this year. Some borrowers are betting that low rates will not stick around, and are choosing to purchase or refinance their homes now. If you decide that buying makes more sense for your financial plan and future than renting, then now is a great time to shop around for a home mortgage. Sites Consulted Refinance mortgage ... Mortgage refinancing ... Home loans ... Mortgage refinancing ... Loans ...

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