Mortgage Update: 10/01/09 We are currently seeing some of the best interest rates in recent memory. Rates on conventional loans are back in the high 4’s for well qualified buyers, while rates on FHA loans are as low as 5.0% on 30 year fixed rate loans. 100% loans are still available for veterans and for low to moderate income buyers on USDA loans. 620 FICO scores are required on all government loans. Conventional loans are still available at 95% on primary residences, and 90% on vacation/second homes. While it is possible to do conventional loans for buyers with FICO scores as low as 620, the rates for buyers with scores below 720 are considerably higher and we usually recommend a government loan for these buyers, such as FHA. These low rates are partially due to a program by the Federal Reserve to purchase Mortgage Backed Securities (MBS) to help keep rates low and stimulate home purchases and refinances. This program is scheduled to start winding down soon and we are expecting rates to start to rise in the next few months. The $8000 income tax credit is still available until Nov. 30th for any buyers that have not owned a home within the last three years. There is some discussion in Washington on extending this program beyond that date, but that is definitely not a sure thing. We are encouraging all qualified buyers to contact one of the professional realtors from Real Estate by Design and explore this great option while it’s still available. The $8000 can be obtained as a refund from the IRS within 90 days of closing and has definitely helped many of our clients set up housekeeping in their new homes. Please do not delay, there is still plenty of time to take advantage of this program. Economic data has shown that the real estate industry has begun a recovery in prices. We have reached the “bottom” that has been discussed so much in the media lately. We are very fortunate here in Texas that we did not see the worst of the decline that was experienced in many states. Some markets saw little if any decline at all. In addition, as we move past the summer months, it has become an even more advantageous time to buy a new home. With fewer buyers currently looking for homes at this time of the year, and prices stabilizing, it is an even better “buyer’s market” right now. Due to the factors that we mentioned above: great rates that may start rising soon, the upcoming end of the tax credit program, home price stabilization and a buyer’s market; the time is right to make a purchase of a new home. Please do not let this opportunity pass you by. Contact one of your real estate professionals at Real Estate by Design for more information on some of the great deals that are available to you.
-Courtesy of Gary Powell, Senor Mortgage Consultant, ProLending Mortgage