If you have good credit and a modest down payment, this just may be the best time in history to buy a house in Vermont. For the past two years or so, mortgage rates have been the lowest they have ever been—in history—and rates under 4% for a 30-year mortgage are currently the norm rather than the exception. An example this writer found at CNN Money put this starkly into perspective. Say you bought a house in 2006 and are carrying a mortgage of $250,000 with an interest rate of 7%. Refinancing that loan at 3.88% means a difference in payments of almost $6000 year.
The big catch is that in order to qualify for these rates, your credit has to be excellent and your debt load low. The three major credit bureaus—Transunion, Equifax and Experian—are each obligated to provide you with a free, detailed credit report once a year. Go to annualcreditreport.com to get these reports. Bankrate.com, an excellent website that offers a wealth of valuable information on all things financial, also has a free tool for estimating your FICO score, that mysterious number used by lenders to gauge your credit-worthiness. The ten simple questions take only a couple of minutes, and can give you an idea of whether you should be paying down any more debt before applying for a mortgage. And it is indeed important to do this before applying—every time a bank checks your credit, your FICO score is affected.
Last December, with some help from one of Vermont’s generous first-time homebuyer’s programs, my wife and I were able to buy a house at an interest rate of 3.5%, and all we had to come up with were the closing costs. This would have been unheard of just a few years ago. Ultimately it is anybody’s guess how long mortages will remain this cheap, but as the national housing market finally begins to recover, prices may be poised to take off again.
Good deals for buyers often mean bad times for sellers. Central Vermont is one of the rare places where this is not necessarily the case. Home prices stayed fairly stable in most local markets during the recession, and Vermont survived relatively unscathed from the wave of foreclosures that decimated the real estate industry in other states. I recently spoke to the agent who brokered the purchase of our house in Montpelier Vermont, and she told me that business in her area of central Vermont had exploded within the last several months. One house was taking bids almost as soon as it was put up for sale; a number have gone quickly at or even above the asking price. A well-maintained house, properly priced, should have no problem selling in Vermont’s healthy real estate environment.
In short, if you have been undecided about whether or not to buy and are in a position to take advantage of these incredibly low interest rates, this just might be the moment to seriously consider taking the leap. And if you are trying to sell a home, you are likely to get a fair price.