As president of The Private Capital Group, a private mortgage banking firm specializing in jumbo and super jumbo residential mortgages, I am constantly being asked about what is really going on in the mortgage market.  Is now really a good time to purchase a home?  Should I refinance my current mortgage or wait in hopes of rates dropping?  Is it possible to even qualify for a mortgage right now?  With all of the back and forth in the news of rates rising and foreclosures at all time highs, homeowners need straightforward answers to straightforward questions.

The reality of the market we're in, is that money is still available for residential financing.  As long as you have a reasonable credit score, assets and income, there is no reason you should not qualify for a mortgage.  We also work quite often with customers to help them improve their credit standing so that they can qualify for a mortgage.  Waiting until the last minute to address questions you may have regarding a loan approval will only hinder you from moving forward when you find the perfect property.  

While guidelines have become much tighter than they were in the past, they've not become impossible.  In the past, customers have been able to get away with going with any mortgage company to qualify for a loan, now though that's become a lot tougher.  This is part of why so many mortgage companies have been in the news from shutting their doors.  Now it is even more important than ever to work with the right mortgage company.  A company that specializes in obtaining loans just like yours.  It is important that the company you work with understand exactly what's needed to structure and submit your loan from the very beginning so as to ensure the best rate of approval with the investor.  Because there are not as many jumbo investors in the market now as there used to be, it is now even more crucial for you to put your best food forward the first time in attempting to obtain a mortgage. 

Another very common misconception that is confusing homeowners right now is that every time the Fed lowers the discount rate, mortgage rates haves also lowered.  In actuality, the Fed lowering the discount rate does not at all mean that mortgage rates will also lower, and they haven't.  In less than a year, the Fed has lowered the discount rate from 6.25% to 2%, and mortgage rates have stayed within a half-point to a quarter of where they initially started.

You might be asking, what does this all mean for me and my mortgage?  It means that now is the time to refinance your adjustable rate mortgage. I understand that many customers still have ARMs in the fours that won't mature for another year or two, and therefore, their dilemma is whether or not to refinance now while rates are still in the fives or continue to hold out at their current rate for as long as possible. Because the future is so uncertain in this market, there is no way of predicting how high rates will be when those ARMs finally do adjust.  Rates could be in the sixes or even higher by that time. 

Inflation is a big problem in our country right now.  It has affected everything from oil to food and other basic commodities.  Because  of the huge problem inflation has become in the United States, some Fed members and other central banks have already begun to call for interest rates to be raised to help in strengthening  the dollar and combat current inflation. 

Homeowners will be much better off refinancing their mortgage while they can still lock in a low rate on their home, than waiting in hopes that rates might get even lower.  If rates continue on their current path and continue to rise, the few months the homeowner continued to pay on their mortgage at only 4% will not be near enough savings to justify an adjusted rate that is much higher than what we can offer today. 

The most important things for anyone looking to purchase a home or refinance an existing mortgage  right now is  to remember that rates are still at all-time lows and now really is the time to lock your rate in.