Mortgage Rates Drop Again. Should buyers hold out for even lower rates or take advantage of what is available? For those of us that have been in the business for some time; 5% interest rates seemed impossible and now we are looking at and under 3.5% interest rates on 30 year fixed rate loans. Older home buyers will recognize this great opportunity but will first time and younger buyers? This could really be one of those once in a lifetime opportunities and we need to educate buyers. For information on current rates please contact me.
It has been a terrific year for home buyers but I am concerned that not enough buyers have taken advantage of this opportunity. Interest rates are decreasing for all types of mortgages and this low interest rate environment will not last.
Purchasing power is very high right now. Some reports indicate that purchasing power is up over 25% in the last 4 years.
Some areas of the nation are seeing 3% on FHA loans. Remember that FHA does not make loans but provides insurance to the lenders who make those loans. Also, FHA tends to have more relaxed standards for borrowers. Current statistics show that FHA loans account for a little over 15% of all new home purchases.
One great benefit of FHA financing that that they do not use the loan level pricing adjustments that conventional loans use. The FHA also makes adjustments for higher cost areas like California, Virginia, and New York.
One of the biggest stumbling blocks for new buyers is the down payment. FHA allows the down to be a gift from family members, close friends, and other sources.
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