I have been getting quite a bit of questions lately such as are banks still doing mortgages? Do you have to put 20% down? Do you have to have perfect credit? Are there any no income verification loans? Are rates going down?
So I thought I would share the answers:
Banks are very much still doing mortgages.
Fannie Mae, Freddie Mac, FHA will all still do loans with as little as 3% down at still very attractive rates. VA and CHFA still do 100% financing
FHA will still write loans with credit scores as low as 580. Fannie Mae and Freddie Mac are looking for 620 or better.
You can still do no income verification loans with as little as 25% down.
The Fed has been cutting the Fed Funds rate (a half of a percent this week to 1%) but fixed rates have stayed between 5.875 and 6.875 with no points. The state of the economy and the housing market should have caused fixed rates to drop well into the 5's. However, everything the Fed is doing: cutting the Fed Funds rate, injecting billions of dollars into the banking system, the numerous bailout packages and stimulus packages have all been inflationary. Fixed rates hate inflation. Coupled with that is the fact that investors do not want to buy mortgage backed securities, now viewed as risky, at 5% when they can buy 10 year treasury notes at 4%. This is keeping fixed rates in the 6's. Still a historically awesome rate. Try to get your clients off of the rate game and focus more on the great value they are getting now by buying both at low prices and low monthly payments. As the economy and the housing market gets better and all this financial stimulation takes traction fixed rates should rise.
Keep the questions coming and thanks for the business,
Dan Ianniello
Senior Mortgage Planner
Connecticut Home Mortgage
Cell: 203-910-7772
I appreciate your referrals!
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