To help offset the sluggish market, lenders have reduced mortgage rates during the past month, said Tammy L. Rowe, president and mortgage broker for West Virginia Five Star Mortgage Corp. in Charleston
"Rates have been falling for the last five weeks," she
said."(Lenders) want to lower the rates to get people interested in buying again."
, August has been a slow month, she
does not expect that will continue much longer.This week, the interest rate on a 30-year fixed mortgage was 6.2 percent, she
said.The rate on a 10- or 15-year fixed rate loan was 5.75 percent.
"This is the calm before the storm," Rowe
said."When the 30-year fixed rate drops below 6 percent, we'll see a huge purchasing market start." Rowe
expects the 30-year rate to drop to 6 percent sometime next week.
West Virginia is not the only place contending with high home prices and sluggish sales, Rowe
"It's a national problem," she
said."It's not just locally." Rowe
said the Federal National Mortgage Association and Freddie Mac
, the county's two largest mortgage providers, both have experienced declines in earnings recently.
"They know people just can't save that much anymore," Rowe
Besides new homebuyers, declining mortgage rates also provide existing owners with the opportunity to refinance, Rowe
"The main purpose that people want to refinance is debt consolidation," Rowe
said."A lot of people have run up their credit cards on summer vacation and have had to pay school tuition."
Refinancing can lead to a lower interest rate and more available cash, she
said.Those who opted for a one- or five-year adjustable rate mortgage a few years ago when interest rates were lower have been hit hard in recent months as rates rose, she
said.Now they have the opportunity to refinance with a 30-year fixed mortgage to lock in the lower interest rates, she
"With an (adjustable rate mortgage), you're playing the market," Rowe
Buyers often chose adjustable rate mortgages for two reasons: First, some do not plan to live in the home they are purchasing for long, Rowe
said.They envision moving to a larger house within three to five years.Second, because of credit score problems, some do not qualify for the longer-term loans, she
"It gets their foot in the door," she
said."It gets the home purchased. ...We can refinance in six months for a fixed-rate mortgage."
Getting Ready to Buy
Although some lenders have eased credit requirements, higher credit scores still can mean better rates, Rowe
recommends obtaining a credit history report from Equifax, TransUnion or Experian and keeping track of it regularly.
"You can get them online for free," she