Home loans still affordable - WALB.com, Albany News, Weather, Sports

Home loans still affordable

May 10, 2006

Albany - - If you plan to borrow money from a bank, there's a chance you could soon be paying more. Today, the Federal Reserve increased the fund rate to 5 percent - up from 1 percent. Mortgage Lenders in the area say if you're on the market to buy a home, you'd better act quickly before interest rates for home loans rise.

South Georgia is in the midst of a housing boom. Lots of land, homes for sale, and construction booming for new homes.

"Lot of activity. Lots of folks looking, getting pre qualified," says Marilyn Odum of Albany Bank & Trust. She says when you're ready to jump from renting to owning, having your own home is a few steps away.

"Bring in your pay stubs, your last year's w2's, tax returns, your bank account showing how much funds you have available for a loan."

But what about interest rates? Fluctuating federal rates could affect you if you don't have a fixed rate on your home loan.

"If your interest rate is 8 or 9 percent it would be worth your while to re-finance," says Peggy Brown of Albany Realty.

Realtors say if the re-finance offer is at least 2 percent less than your current interest rate, go for it. As for first-time home buyers in South Georgia, you're in the right place at the right time.

"There's a lot of properties to choose from, a lot of houses on the market so sellers are having to make more concessions in order to make the sell," Brown says.

That makes it better for you since there's so much competition from the seller's standpoint. And dont forget, owning a home also comes with another benefit.

"Now mortgage interest is about the only thing you can really take off on your income tax too, so that helps to consolidate bills if you have a lot of equity on your property," says Odum.

The current interest rate for a 30 year fixed home loan is 6 point 3 percent. That's low compared to previous years where interest rates have climbed to 8 and 9 percent.

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