Part of my job is staying informed so I can give advice to my Fort Hood home buyers and sellers. I owe it to them to be a good source of reliable information.
For the past two weeks, I've been staying in particularly close touch with local lenders, checking in on movement in interest rates. I'm also checking on the availability of funds for federally insured loan programs (VA and FHA).
GOOD NEWS: The lenders assure me that money is available to lend on VA and FHA loans. All you have to do is qualify for the loan, as in the past.
VA LOANS: This is a true NO MONEY DOWN loan. As of yesterday, if you have a credit score of at least 620 and meet the income to debt ratios and other requirements, you could get your VA loan at 6.5% fixed rate for 30 years.
If your credit score is between 580 and 619, you can still get a VA loan, but will pay a little higher interest rate.
Today, the rate for a 620 score is up to 7%. Still not a bad rate, all things considered. But rates are moving. They may go higher. If you are thinking of buying, this might be the time to do it. Sellers are motivated. UPDATE: VA and FHA Rates were back to 6.5% on Oct. 2.
FHA LOANS: As of yesterday, for a 620 score, you would pay about the same rate as the VA loan, but you must make at least a 3% down payment. As an example: On a $100,000 home, you must pay $3,000 down out of your own pocket and finance $97,000. You are allowed to receive your down payment funds as a gift from a relative, if that is an option. FHA is a little more flexible for buyers who have had some problems in the past due to medical or family issues that may have affected their credit score.
NOTE: FHA has terminated all down payment assistance programs as of today. As of January 1, 2009, the minimum down payment requirement will increase to 3.5% of the purchase price of the home.
The FHA insured loan rate is 7% for a 30 year fixed loan today.
TO RECAP: If you qualify for a VA or FHA loan, money is available for you to buy a home at Fort Hood, at reasonable interest rates, fixed for 30 years. Rates may be headed for an upward trend, but that is to be determined.
Click here to prequalify for a VA or other home loan. There is no charge for this service!
If I had a dollar for every person who asked me how I could fund loans with the current credit crunch, we'd all be eating steak for dinner!!!
It isn't bad out there at all.
Tom - That's what I keep hearing! But I can't blame buyers for being so cautious or of being afraid to even ask if they can get a loan right now. No one is bothering to address the VA and FHA loans in the news media, to say that funds are available. Positive news doesn't bring in viewers! I did finally, at last hear this morning, a report that small banks, local banks and credit unions have money to lend and are not caught up in the credit crisis. Buyers need to know this!
Business is not that bad in the D\FW area either. We still have alot of buyers calling in and the loan officers are staying busy.They come to our office with loan programs that can meet many buyers needs. Public perception is running the show now, everyone reads about a market across the country collapsing and they assume the market in every town in the country is in trouble. True it has slowed down due to the loan fiasco but its not the end of the real estate business. 1980 and 81 FHA was 171\2 % and they still bought homes. So it will be ok, If the person on tv or someone who wrote a article is not out there activley selling real estate then they dont know what they are talking about and the hot air they are spewing isnt worth a hill of beans. So i take what they say with a grain of salt. Usually I dont take it at all.
Tim - As usual, you always get to the heart of the matter with humor and comments based on your long experience in real estate! 17 1/5 percent interest... I remember that ( of course I am much younger than you! (NOT!))
As real estate professional,we always have to inform our clients as well as potential clients of the current mortgage rates so that we can help them make better decisions toward buying or selling a home. And thank you very much for your nice comments on my blog. Great post.