9/10/08

Mortgage rates plummet - effect on San Francisco?

All the talk in the real estate industry over the last 24 hours is how interest rates plummeted a 1/2 point, which should mean you can afford 5% more than you could before. I have a buyer now who can only go up to $600,000 and we had just discussed a $645k condo... something that may now be within reach, so she's checking with her mortgage Broker.

But will this news really effect San Francisco real estate? Tight lending standards have not changed. You still need a very high credit score to qualify for the lowest interest rates. And you usually still need 20% down. Without both you may not qualify for any loan.

So as is usual in San Francisco, I expect this to be a tale of two cities... meaning it will impact different parts of town differently. The areas of high-income residents who tend to have higher credit scores, and have plenty of cash, may get another boost. The areas that have been hardest are unlikely to see any relief from this news.

But the real question for you, the Buyer, is how it effects you, and whether or not you can now afford the home you really want? For that, Step #1 is to know your credit scores AND your reports. Read this post for where to get your Reports and Scores (hint, it's NOT any of the sites advertised online). The post also gets you started in cleaning up your reports and improving your scores. If you've never done it before you are likely to be amazed at what's on your reports... a lot of which is easy to clean up.

You may also want to read:
Free Credit Reports and why you need them

First Time Home Buyer - where do I start?


Value of a Pre-Approval




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