Well, the big development, coming out just today, was that Fannie Mae has chosen to relax it’s standards to allow conventional financing up to 97% even in distressed sales market.  The affect of this new change is that for the past few months, most borrowers had to have a minimum of 5% and many lenders even insisted on 10% down.  Now that Fannie Mae has said they will once again purchase mortgages with conventional financing and only 3% down, borrowers are not forced to get an FHA loan if they are looking for minimum down payment.  That allows them to avoid the 1.5% FHA “funding fee” that must be charged on FHA loans.  Obviously, these borrowers will still have monthly mortgage insurance but they are allowed higher purchase prices than FHA allows.   All in all, a good Loan Consultant can still help to guide perspective borrowers into the right choice for them.

The other big piece of news today was that Consumer Confidence has dropped to a low not seen since the Carter administration.  This is most likely due to the fact that consumers at large feel that there is still more difficulty coming in the economic markets. 

My summary??  Rates are still really good.  The thing that is stopping most borrowers is that there is now a shortage of ‘niche’ programs that fit borrowers that do not fit conventional guidelines.  While I understand that many programs should not have been so easy, I think there needs to be a balace that can accomodate those that are not conventional but still good credit risks.  Until we begin to see some of those programs coming back, difficulties will continue. 

If I can be of any help to you, please do not hesitate to call/email me!!

Before buying a home, it it important to decide how long you plan to live there.  A rule of thumb is that it rarely makes sense to buy if you expect to move within two years. That’s because when you do sell, there are costs associated with selling.  Buying a home when you expect to move before too long is a risk, especially in an uncertain market.

However, most buyers live in their new home an average of seven years or more. If that fits you, it almost always makes sense to buy rather than rent, in practically any market.

If you are thinking about delaying a purchase because you want to “time the market” to get the very best deal, that is almost impossible to do with precision. Even if you are in an area with declining market prices, the most knowledgeable experts cannot reliably anticipate the “bottom” of a real estate market. Afterwards, they can look back and say, “The market began to turn in 1997,” like it did in some areas of California that had a tough market in the nineties. Before the turn, though, no one knows.

If you aren’t an owner, you’re a renter. Renting is just throwing money away. You don’t get to reduce your income taxes by itemizing deductions like property taxes  and mortgage interest. 

Interest rates are low right now. If you wait, interest rates could be higher. That means your monthly payment will be higher, too. No one can predict rates that far in the future but rates are very low right now.

The easiest way to accumulate wealth is through home ownership. Three out of four people have more equity in their home than assets in retirement plans, stocks, mutual funds, and savings. Though no one can guarantee your property will appreciate, over time it generally does. Over the long term, you can generally count on it.

As a buyer, what do you need to do to give you the best bang for your buck?  First of all, determine your price range. Then choose a neighborhood where your target price is in the lower tier of prices in that neighborhood. That way, your home has less vulnerability on the down side and the higher-priced homes will help pull you up during hot markets.

Also, try to steer away from homes on busy streets or homes that back to busy streets. Buy a house as close to the center of the tract as possible. Don’t buy houses across the street from a park or a school. Try to buy in a homogeneous area, where all the homes are similar to one another. For example, if you are buying a single family home, you do not want to buy next to an apartment or condominium complex.

And remember, talk to a real estate agent and ask for advice. Ask them what the market is like in your area.

There are LOTS of sellers out there right now. Inventory is high. If you make an offer, ask for incentives to buy that particular home.

If you are putting ten percent down or more, you can ask for up to six percent of the purchase price in incentives. These incentives CANNOT BE CASH, but you can ask the seller to pay your closing costs. You can also take advantage of programs such as the Nehemiah Program that allows sellers to contribute 6% of the purchase price which includes your 3% down payment and 3% towards closing costs.  This program works if you qualify and are looking to get an FHA loan.

If you’re putting down five percent or less, you can still ask for incentives. The amount you can ask for is limited to three percent of the purchase price. The reason there are limits is because you are going to finance the purchase with a mortgage and lenders have guidelines on how much sellers can provide in incentives. Those guidelines help them limit loan fraud.

Talk to a real estate agent. Have that agent recommend a lender who will talk to you about incentives and explain what you can request.