This is my first blog so I will do my best here...
What a wild ride it has been so far this start of the 4th quarter! With the bailout being passed and the elections coming along and the stock and bond markets going in the tank, have we seen the worst?
In the residential real estate market in Montana, things have slowed down a bit. We have been blessed with the continuing need for refinancing. But for residential real estate, there have been a bevy of changes.
First off, FHA has increased its risk based pricing making the upfront mortgage insurance premium 1.75% rather than 1.5% and the monthly MIP rate to .55% rather than .50%. In addition to that, FHA has gone away with the down payment assistance programs. And then beginning in January 2009, the initial cash investment from a potential buyer will increase to 3.50% compared to 3%. Credit scores are also determining interest rates. Nothing under a 580 score will be purchased.
Conventional loans have also changed. Risk based pricing has limited so much of what we could do before. Credit scores, LTV's, cash out and down payments has all left us scrambling for products that will best suit our clients.
Montana has seen some slowdown in the fact that there is a lot of inventory out there for homes. There has also been a drop in the value of homes. Although we have seen these changes, I do see that we are still doing loans and the bank is in great shape and continues to remain strong.
We will continue to see the increased popularity of FHA loans and refinances in the coming months as we sift through the economic scuffle we are going through.
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