While home prices in the Baltimore area may have softened in recent months, steady mortgage rates give homeowners an opportunity to make improvements that can mean big bucks in the future.
The Federal Reserve Board, which sets the rates banks charge each other for money ? which impacts all other interest rates ? has kept rates steady in recent weeks. At the same time, home mortgage rates have remained steady, driving more people to file mortgage applications, according to the Mortgage Bankers Association. In the past week, the association reported, the number of mortgage applications including refinancing rose 1.8 percent from the previous week. And, the average 30-year fixed-rate mortgage stands between 6 1/8 percent to 6 5/8 percent, depending on points. Those rates remained unchanged throughout the week.
As a result, industry experts say, it may be a good time to invest in your own property.
Dave Skaff, administrative vice president of the mid-Atlantic Mortgage Division for M&T Bank, said refinancing to add value to a home just makes sense.
“The most value will be to increase the square footage in a home,” he said. “Take $50,000 and finish out the basement with a nice rec room, a bed room and a full bath.”
Charlie Maykrantz, assistant vice president of the mortgage department at First Mariner Bank, said older homeowners may benefit most with adding equity.
“We have many people who, instead of moving up or back down, want to stay where they are and improve their home, understanding that the market is going to come back again,” Maykrantz said.
He agreed with Skaff that adding square footage to a property is a good bet.
“Any type of addition you will see value added,” Maykrantz said. “In a lot of the housing stock, we find the one problem is that it is a dated property, so anything that increases the size of the housecan increase the value.”
But refinancing or drawing down equity isn?t something that should be considered lightly, both Skaff and Maykrantz said.
“Individuals need to look at their financial picture not just for tomorrow, but for six months, a year, two years down the road and place themselves in the position where they want to be,” Maykrantz said. “As lenders, we?re not just giving money for mortgages. We?ve really become a financial adviser. We?re going to put [the borrower] in a marathon and not just a sprint situation.”
