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Falling mortgage rates bring a tough choice

SHARE Falling mortgage rates bring a tough choice

Lucky you if you're in the homebuying market right now. Mortgage rates are lower than they have been in the lifetimes of many potential buyers, and they fell again last week.

The national average for a 30-year mortgage was 6.60 percent onThursday, the first day of the new quarter. Rates have been lower each week since the end of August, and prospects are good for a further drop because mortgages are linked to the bond market, where rates have fallen below 5 percent for the first time since 1967.

This leads to a dilemma for some buyers - lock in right now or wait and see if you can do better in the weeks ahead. One way to decide is to look back at what would have happened if you had locked in several weeks ago.

For example, on Sept. 3, you could have gotten a rate of 6.8 percent on a 30 year mortgage and this week you can get 6.6 percent. While that's a drop of two-tenths of 1 percent, it doesn't translate into much difference on a mortgage.

On a loan of $135,000, you would pay $880 a month at a rate of 6.8 percent and $862 with a rate of 6.6 percent, a difference of just $18.

Also, in the past three weeks, the decline in mortgage rates has been minuscule each week - from 6.66 percent to 6.64 percent to 6.60 percent. In other words, nothing worth waiting for.

On the other hand, if the current trend continues, we could see a rate of 6.00 percent by month's end. That would drop the payment on that $135,000 mortgage to $809, an appreciable difference.

If you already have a house and would like to help low-income homeowners whose properties need fixing up, join the "Christmas in April" effort. It pulls together volunteers and other resources to help families rehabilitate their homes. Harvard University's Joint Center for Housing Studies and Fannie Mae are both involved, and there are 220 affiliates, some in every state. For more information, call toll-free 800-4-rehab-9. The group claims to have a Web site - www.

christmasinapril.org - but it didn't work when I tried it.

Any real estate agent will tell you that a bad kitchen will hurt your efforts to sell the house. A savvy marketer has stepped up with an idea to solve the problem - send him a photo of your current kitchen and surrounding area, and he'll send back an 8-by-14 rendering of how good the kitchen could look if it were fixed up.

You then prop this rendering up on the kitchen counter so buyers can see the potential. Kind of a virtual kitchen fix-up.

All this doesn't come cheap - it's a pricey $400 to get that rendering. Add a little more, and you might be able to replace the floor at least instead of fobbing the job off on the buyer. Real estate agents also will tell you that buyers want you to do the fix-ups - they're mostly not interested in having the work done themselves.

If the virtual kitchen fix-up idea appeals to you, however, KitchenView can be reached toll-free at 877-582-4688. They also claim to have a Web site - www.kitchenview.com - but when I visited, it was still under construction.