## Calculating for the Future: Understanding the Low Morgage Rates of Today

While seeing into your financial future can be difficult. Understanding a few key assumptions and numbers associated with your mortgage will allow you to get a good idea of the money you can be spending or saving in the years to come.

Today’s mortgage rates are the best in years, due to the slow economy and the housing market. Those wishing to apply for a loan may be pleased with the deals that are available. For instance, what is known as a jumbo loan now costs consumers less then ever. The current average rate for a thirty year fixed rate loan is approximately five percent. There are also rates available, depending on your personal circumstances, for as low as three and a half and four percent. To be eligible for these low rates, you will need to have a steady, good income, a down payment and a fairly low amount of debt.

How Do Consumer’s Qualify For Lower Rates?

To qualify for the lowest available rates, most consumers will have to pass several tests. There are a few general things that finance companies look for before first considering you for these low rates. One such qualification most banks and financial institutions require is for the prospective homebuyer to have proof that their total debt is not over forty percent of their income, before taxes. This includes debts such as car payments and credit card bills. You must also be able to show proof of your income and steady employment for up to several years. Your credit score has to be good, usually near seven hundred or better, which is quite high. And you almost always need to have a down payment of at least ten percent.

How to Use a Free Mortgage Calculator to Help Estimate Costs:

Using free mortgage calculators is fairly easy if you have the needed information on hand. If you are working with a realtor, they will be able to do the calculations for you. If not, you can easily use the tool yourself. The first step is to determine the principal amount that you will be paying on. Enter the amount on the mortgage or principal line of the calculator, which is almost always the first line. Next enter the number of years the loan is for. Enter the interest rate you’ve been given and click on the calculate button. The mortgage calculator should then give you the estimated mortgage you will be paying.

How to Use a Mortgage Calculator for the Future:

Most mortgage calculators are fitted with a tool that will allow you to estimate the possible value of your home in the future. To do this you will need to enter the home’s current value. You can usually get this information from real estate sites that include recently sold homes in your neighborhood, with houses that are similar to yours in age, size and appearance. Choose the year you would like to check to see what your home value might be, and enter it. Click on the key for appreciation rate. You can choose whether you would like to see the rates for several options, or for one just in your area.

Why Now is a Good Time to Get a Mortgage:

Recent marketing reports state that the prices of houses are becoming more stable. This is good news for those wishing to purchase a new home, or for those buying their first home. Although it is never possible to predict the outcome of the economy, today’s mortgage rates are some of the best ever for those who qualify.

## Home Tax Credit Going Away

The Home Buyer Credit is now gone and there are no more plans to keep it going. However, if you have the correct documents you may be able to claim this credit when doing your tax returns next year. Some people may still be able to receive this credit until September 2011.

One of the more talked about topics on this site is the home tax credit due the involvement of money, up to \$8,000 for people who buy homes. This credit has been lengthened four times continuing to make good terms and goes all the way back to when Bush was president. It has helped thousands of people purchase homes. Some fraudulent activity has occurred but regardless this credit has been one of the best stimulus plans the Obama administration has put into place to address the housing and economic problems.

With home prices coming down in many markets is it probably unlikely the credit will be offered into 2011 but many home owners are begging who just barely missed the deadline(April 30th qualify, Sept 30, able to claim). Other people such as some people in the Armed Forces and some stateĀ  workers can still qualify for a different credit but for the majority of home purchasers the credit is gone forever. A credit that can still be had is the house efficiency credit in the amount of \$1500 designed to lower the costs of energy in the medium and long term.

Another difficulty for the home buyer credit has been being able to claim it. There are multitude of claims and other credits the IRS has been sluggish to process them all. Most people have to wait around 3 months to receive their credit. You can make the process faster by making sure you have the right paperwork when you file your taxes. Form 5405 is the correct form to have with your tax return to be able to get the credit and you must have at minimum one of the following documents. If you are not sure, include them all or ask a professional to be sure.

-A copy of the settlement showing the names of all involved, where the property is located, the price paid for it, and when it was bought.(prior to April 30 2010 to get the credit). This is proper from HUD-1 Statement. For a house just built where you might not be able to get that statement you need a replica of the certificate of occupancy(normally available from the city office) that details the name of the owner, address and time the certificate was signed.

-Current home buyers who can get this credit must demonstrate that they lived in their previous home for at least five straight years during the eight year period that ends on the purchase date of a new house. Evidence of this would be mortgage interest paperwork and property tax or possibly home insurance records.