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Mortgage Update Using the market to save you money

I am hoping to put a common con-

ception to rest. Newspapers make

their money telling “scary” stories,

but not giving a total three hundred

sixty perspective of every event.

That is the exact case when it

comes to today’s mortgage markets.

The fact that there are more than

enough foreclosures, short sales,

and failing banks, sells papers. To

tell how this can all work for you fails

to glean headlines, I’m hoping to

shed a little light on that today.

Today (week of 11/28/11) a con-

forming 30 year fixed rate (on aver-

age) with no points and average

closing cost of $2,000 +/- is 4%

(APR = 4.087%). Now that, based

on today’s dollar, is the lowest in

the history of recorded interest rates.

Rates were being recorded since

May of 1975, and the all time low is

today.

Now, when you couple that data with

the fact (sorry to say, it’s a fact) that

home prices have slipped about

15% over the past three years, you

get the “other side of the story”.

I was taught, buy low, sell high.

Never has there been a time like

that today. You can buy a home

that was $400,000 in 2008 for about

$350,000 (in some, not all cases)

and attach a 30 year fixed at 4%

(assuming 20% down-payment) and

you have a monthly Principal & In-

terest payment = $1,337. Compare

that to 2008 when the average inter-

est rate was 6.625% (still a WOW

rate on a historical level) and you

could have only purchased a home

= $260,000. Therefore, in this ex-

ample, you get 35% MORE home

for the same monthly payment. That

is the absolute definition of “buying

low”.

Tune in next time when I discuss the

myth: “It’s difficult to qualify for a

mortgage”.

Written by:

Bill Clouse

NMLS# 49837

W. R. Clouse & Associates

Mortgage Company, A Division of SCB Bank

3091 E 98th St, Suite 280

Indianapolis, IN 46280

(317) 571-7800

FAX (317) 571-7810

December 2011

Be prepared before

the snow and ice

come:

Buy shovels, rock salt,

sand and extra food

before winter.

Buy a fire extinguisher,

or make sure your

existing one is in good

working order.

De-ice walking and

driving surfaces.

Make basic repairs to

your exterior, including

shutters and siding

Insulate pipes, caulk

windows and weather-

strip doors.

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Pending

Pending