This Friday, guest blogger Barbara Van Duyn of First Priority Financial discusses how mortgage planning can help protect homeowners in a declining market. If you have any questions you can reach her directly at Barbara@VanDuynGroup.com and tell her Anne sent you.
Good news for those of you who have home equity lines of credit tied to the prime rate. For a second time this year, the Federal Reserve reduced the Fed Funds and discount rates. This time it was a .025 percent on October 31. Prime Rate now sits at 7.500 percent, down from 8.250 percent. Long-term mortgage rates are also at their best levels of the year averaging 6.00 percent. But rates aren’t the only thing to come down. In case you’re wondering, the effects of the credit turmoil you’ve been reading about since August has indeed started to surface in housing statistics. New home sales fell to the slowest pace in more than seven years, the median sales price had the largest 12-month decline since 1970, and August’s pending existing home sales fell to the lowest level on record, which begins in 2001. What does all of this mean to the average homeowner? Well, that depends on whether that homeowner has a good mortgage plan in place. Borrowers with a strong plan that not only helps them to build wealth faster and easier, but also safeguards their assets and gives them access to their money, are probably less concerned about the shifting market. They’ve got their assets liquid, where they can access money should they need it in a pinch. Homeowners who do not have a good mortgage plan may be feeling wary, cautious, or perhaps even downright panicked, because with each dip in the market, their appreciation slips out the window. The fact is: markets rise and markets fall. And while there’s no way to predict or control the market, there is a way to safeguard your equity. A qualified mortgage planner can help to create a plan that not only keeps your assets working for you, but also helps you to position them where you can access them if you need them. Especially in fluctuating markets, homeowners should consult a qualified mortgage planner to help them create a mortgage plan to secure their equity and protect it against the market’s changes. Under the guidance of a reputable mortgage planner, homeowners can significantly reduce their exposure to the risks that come with a slowing market. Remember, the best action is strong prevention.
