interest rates
As a Realtor® who receives many inquiries from potential buyers, I often speak with people who have no knowledge of the home buying process or what it takes to buy a home. This is not a bad thing at all, for we all must be taught and educated on the process at some point.
If you are somebody who has never bought a home or obtained a home loan then you may not know how much money you might need to obtain a loan. You probably know that you need a “good” credit score and have to make a certain amount of money. Both are true, even if you don’t know the specifics. However, most people who are just getting started don’t know the down payment that will be required. Some still think a 100% loan or zero down payment is attainable. Due to the sub-prime mess and tighter oversight of the mortgage market that is now near impossible. There are some programs that may offer a zero down situation, but they have strict requirements. The most common zero down loan is a VA loan which is only attainable by past or present military personnel.
Now a days, the least amount of money you will need for a down payment is 3.5% of the sales price. This loan is a FHA (Federal Housing Administration) loan. That is why it is so common now when it was pretty much ignored during the housing bubble. It also explains why you might have heard how the Federal Housing Administrations funds were so low. It’s not just the foreclosures, but the extremely high amount of money being borrowed by home buyers. Other than the FHA loan you can obtain a conventional loan which will require 10 or 20% down. Usually the latter.
Yes we have extremely low rates right now, but your application and buying power is more scrutinized than ever. No investors want to purchase a loan that would be considered a risky loan. Your credit scores need to be higher, your down payment needs to be higher, and you must have a good “debt-to-income ratio”.
240-848-3322
Category : Blog
Throughout the years the winter season has been looked at as a slow time for real estate, new purchases, and refinances. The cold weather, school schedule, and holidays typically deter many home buyers. Most of the buyers and sellers decide to hold off until the spring. However, tis the season, because homes are still selling at a fast pace and low interest rates continue to influence more refinances.
On the real estate side, there are a number of factors that are helping the market stay active and strong. The largest still being the tax credit for first time home buyers which was extended from November 3oth, 2009 to April 30th, 2010. For any first timers who missed out on the opportunity the initially, they now have a second chance at free money and are taking it! The credit was also expanded to include move-up/repeat buyers. The Worker, Home ownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010). Those two incentives alone are an extra push to influence buyers to make the move now, despite the season. Consequently, sellers know this and more homes are being listed. The number of foreclosures and short sales are still high too so many people want to get the good deal and tax credit.
On the lending side, the rates still remain incredibly low and attainable. Obviously that is another incentive to buy now, but it also keeps people refinancing their current loans in to more affordable loans where the lower rate will save them money on a monthly basis. Loan officers and lenders have not seen a winter like this since the housing bubble and the feeling is mutual from Realtors.
So, while usually many buyers and sellers would hold off until the spring, thus is not the case this year. Tis the season to buy or sell your home!
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Ben White — search Rockville MD homes — 240-848-3322
Category : Blog