One option buyers have (and those who are refinancing) is to lock in their interest rate (i.e., so your rate does not change even if the rates for your particular mortgage program shift up).

The mortgage company will quote you a particular rate when you first get pre-approved. This rate MAY or MAY NOT ultimately be the best rate, depending on what rates are doing at the time.

Right now it might be prudent to lock in your rate, since they are the best they have been in about 2 years.  But I am not a mortgage professional. So check with YOUR lender to see what they recommend.

A rate lock will usually last up to 45 days (but they vary from program to program), so depending on when closing is scheduled, this may or may not work. Also, if the rates seem to be trending downward, your lender may suggest watching the trends before you pay the fee (if there is one) to lock in.

On the other hand, if rates are expected to go up, or are starting to move in that direction, locking in may get you the best rate NOW and save you some bucks on your monthly payment.

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Start your CARLSBAD HOMES SEARCH here (and other San Diego communities)

Download FREE BUYER AND SELLER REPORTS here

Visit CARLSBAD COMMUNITY REPORTS for profiles on communities, subdivisions and neighborhoods (including other areas)

Are you a first time home buyer. Check out First Time Buyer Central.

Have you taken a look at the interest rates recently?

If you have been holding off buying, thinking that prices may go down, you might take a serious look at the interest rates.

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Prices are changing in some areas, but not all. But another important financial consideration are the INTEREST RATES. The rates have DIPPED BELOW 6% for fixed rate mortgages, the lowest in 2 years. We don't know where they will go in the future, even with the Feds recently cutting the rate another 1/4 point.

Even if prices drop a bit, if the rates go up, you could lose out on the best combination of home price and monthly payment that we've seen. And it may be THE TIME for you to refinance your current mortgage as well.

Talk to your mortgage professional to see if NOW is the best time to make that move.

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Start your CARLSBAD HOMES SEARCH here (and other San Diego communities)

Download FREE BUYER AND SELLER REPORTS here

Visit CARLSBAD COMMUNITY REPORTS for profiles on communities, subdivisions and neighborhoods (including other areas)

Are you a first time home buyer. Check out First Time Buyer Central.

It is not unusual for buyers or sellers to uncover the fact that they have credit problems when attempting to secure a mortgage. Or perhaps in the pre-approval process you learn that there are some issues that need to be fixed before you can qualify for a loan.

Beware of credit fixing solutions! There are companies out there that offer to help you fix your credit, for a fee. But these solutions may actually cause more problems than they fix.

You are smart to address the credit problems you have, but this may NOT be in your best interest.

Read more on this at Consumer Credit Counseling - the world's best sale pitch.

Why this title? Read on - if you are selling, or (hopefully) negotiating an offer on your house, this is important information.

Sellers, it's time to be cautious!

If you are selling your home you have been a buyer before. So you know something about getting pre-approved and why this is important. And if you are an experienced seller you likely dealt with the issue of pre-approval for buyers who submitted offers on your listing.

There has been lots of hoopla in the media about the mortgage issues in recent weeks, particularly in the sub-prime market. What does this mean?

• some mortgage money is no longer available
• some lenders are in deep trouble (e.g., New Century) or can no longer lend money for folks looking for 100% or similar loans
• there are likely some buyers who will no longer qualify for a loan because they don't have a down payment due to more rigorous guidelines

Getting pre-approved as a buyer is always recommended. And as a seller you should ALWAYS ask for a pre-approval letter with an offer. Why would you accept an offer from someone that you do not know is qualified for a loan?

But given these new developments:

• it is critical that you DEMAND a pre-approval letter in order to review and accept an offer. To not do so is a huge risk, especially if the buyer is a low or no down payment buyer
• And it might make sense to be sure that the pre-approval is RECENT (if it was 3 months ago the circumstances for that buyer, given the market, may have changed and they may no longer qualify, or the program they were going to use may not exist any longer)
• You need to know if it is a reputable lender

The other concern is that an offer that has already been accepted COULD fall apart if the buyer, despite being pre-approved, can no longer obtain the loan they need due to changes in the programs that are available.

This is NOT to scare you, or to discourage you from selling, but simply to urge caution with the offers you may be receiving, and to make sure things are on the up and up. Your agent can help with this.

Keep in mind that making sure buyers are qualified and can meet the standards of the lender is a good thing. And lending money to risky buyers (poor credit, stated income, 100% in some cases), as has been done in the past, is not wise, so changes to these practices, with more rigorous standards and guidelines, is best for all concerned.

I just posted a Market Update Guest Blog which focuses on the mortgage industry and recent issues, especially in the subprime market. The next few weeks will be telling in terms of the impact this may have on some buyers (those who would have normally been looking for 100% financing).

It is helpful reading, and reprinted verbatim with the author's permission. Good article for both buyers and sellers in this housing market.

I recommend you take a look at it.

Jeff

I am inviting a number of folks I know in real estate related professions to contribute their thoughts to my blog, as I want to make sure that I continue to provide the information consumers would probably like to have, whether buying, selling, or simply out of general interest. I think you'll enjoy my guests.

I will keep you posted on who will be joining me here and on my other blogs, First Time Buyer Central and Fans of Coastal San Diego.

I just posted a market update from Chris Comer at Pacific Capital Mortgage. Take a look. Chris will be providing more information about the mortgage industry and answering questions, so please feel free to write in with any specific mortgage questions that you have.

Have a great weekend!

Here is the next post in this 6-part series. If you missed any of the earlier posts, you can read them here (Part 1, Part 2, Part 3, and Part 4).

• Contact lender to ensure all necessary information has been provided
•  Follow loan process through to the underwriter and contact lender (or buyer’s agent) weekly to ensure processing is on track
• Keep seller informed of status of loan
• Relay final approval (i.e., loan commitment) of buyer's loan to seller