Mortgages

What type of morgages survived the credit crunch? FHA Insured Mortgages; Member Only Credit Union Loans; Rural Home Loans; and Local & State Agencies.

The mortgages we are dealing with now are far different from the ones our buyers obtained a couple of years ago. Banks have become much stricter in what they will and will not accept for qualifications. Gone are the days of only needing 'a pulse' to qualify. But don't lose heart - good loans are available to qualified buyers.

FHA-Insured: FHA insured mortgage programs have been available for decades - especially for low to moderate income families. But now FHA has new loan limits (as high as $625,000) that make them especially attractive in high cost areas. FHA loans expect to account for 25%=/- of the loans signed in 2009. Because of the lower loan limits they originally offered - only about 4% of the homes sold from 2003 to 2006 used FHA loans. FHA Loan Features include 3%+/- Down; Finance closing costs; No prepayment penalty; Relaxed debt/income ratios; 1% cap on lender closing costs.

Members Only Credit Unions: Credit unions surved because they followed the fundamentals of lending. They take in deposits, they make loans based on sound principles, and they charge more on these loans than they pay on deposits. There was no incentive for credit unions to get involved in the subprime mess. They did not sell and repackage loans and did not go into shakey investment schemes. Credit union originations rose 10.1% during the first half of 2008.

Rural Home Loans: Loans that are back by the USDA Rural Development are limited - but you do not have to grow crops to qualify. These loans are for people living in rural arreas with a population of less than 20,000; people with incomes that are under 115% of the median income for that area (somewhere in the range of $60,000 - $70,000 per year); People buying homes, not just refinancing or getting equity loans.

Local, State Agencies: There are a variety of city, county, and state housing assistance programs that cater to teachers, police officers & fire fighters.

Alice and Jim Hayes are Licensed Realtors with Loveless Realty in Libby, MT. Please call us at 406/293-8364 or 293-1926 or visit our 24-hour open house at www.alicehayes.com