This is the lowest that rates have been in years!!! And remember, each point dropped translates to saving about $100 per month on the same loan. So, that general rule of thumb might help to put this into perspective. I wanted to pass today's rate along to you, since we're not sure how long it will be this low. Between the low home prices, the large selection, and these good rates, it's a great time to buy real estate right now - especially for investors!
For more info on current rates, call Leah or Joel with Carolina One Mortgage at 843.795.7810!
Many buyers have been asking about the tax credit for home buyers coming up this tax year. Although this topic has gotten a lot of coverage in the news, people have gotten really confused about what it is. So, I wanted to clarify some of the misconceptions I’ve noticed when talking to home buyers.
The biggest misunderstanding about this tax credit is that every home buyer does not get it. This credit is only for first time home buyers. But, the good news is that the government usually defines people who haven’t owned a home in 3 years as first time buyers. So, you may not technically have to be buying your first home in order to qualify for this incentive.
Another misconception with this tax credit is that buyers think this credit is free…
Not too long ago, buyers were able to purchase homes without making a down payment. There were several options for these zero down loans, such as Fannie Mae’s My Community or Du Flex loans. An around the way (but quite popular) option for doing this with FHA was getting the seller to contribute the down payment money to a non profit organization like Nehemiah or AmeriDreams, which then granted the money back to the buyer for a fee.
Despite the popularity of such loans, lenders are now realizing that these kinds of loans did more harm than good. In short, there is no such thing as a $0 down mortgage anymore. Fannie Mae has raised guidelines for their loan products and is not allowing zero money down now.
However, borrowers who were…
Private Mortgage Insurance (PMI) is an insurance policy the borrower pays for which protects the lender in case of foreclosure. You’ve probably heard about PMI before, since most loans over 80% usually require PMI. It has actually gotten harder to get PMI with recent FICO changes. Many of the insurance companies are not writing policies unless you have a 620 credit score.
So, you want to make sure that if your loan requires PMI, your lender orders the policy upfront and you have no trouble getting it. Most people don’t realize that the money they pay in monthly mortgage payments is collected by the lender and paid to another institution (most people think the lender keeps this money).
There are loans now available called “lender paid MI”…
One of the most important parts of choosing a lender is usually the last thing people think of. Make sure that the lender you choose is actually going to have the money at the closing table. Believe it or not, this has been one of the biggest problems over the past year. Work with a bank that closes on the loans they approve or commit to. When I give approval to my clients, I’m committing with a few conditions (such as satisfactory appraisal). But, outside of these conditions, I’m committing my loan to you.
One way to make sure your loan will close is to make sure you’re working with an in house underwriter. For example, since I’m my own underwriter, when I approve a loan it has already been signed off on and approved. Some home loan officers have…
The best advice I can give is to own your credit report. And, make sure it’s accurate before it gets pulled by a lender. There are several websites available to help you check your credit. For example, Equifax.com allows you to see your report. You don’t get to see your credit score, but you can make sure the report is accurate. If you see any errors, talk with your home loan officer to get them fixed before buying a house.
And, remember that any changes or corrections you make to your credit report need to take place well before buying a house. You should not make any changes up to 60 days before buying because you can actually do more harm than good at this point. But, if you correct errors in advance, it can really help when it comes time to…
What credit score do you need to buy a home? The credit score you need largely depends on which home loan you choose. For example, with FHA loans, no credit score is even required.
There is a magic myth that rates change everyday. Actually the only thing that changes is what it costs to get that rate you want. This cost is called discount points, and sometimes it is referred to just as “points.” When a lender reviews applications and assigns a rate for a loan, he or she has to take into account what the buyer’s FICO score is.
As of December 17, 2007, Fannie Mae (which is the bulk of loans written) introduced new changes to how that’s done. If your FICO score is less than 620, it’s going to cost 2 discount points (or 2% of your loan)…
There has been a lot of talk recently that the Federal Reserve lowered interest rates. This is not for mortgage rates, though – it’s for short term lending rates. In our business of home mortgages, it affects home equity lines of credit. Typically when the Federal Reserve cuts the rate, mortgage rates actually go up. Not by much, but they do go up. The last time the Fed met, we saw that mortgage rates went down, which is not what usually happens. The only way to explain this is that there is nothing traditional about this economy.
So, why does this matter? When the Federal Reserve cuts interest rates, people with short-term loans (credit cards, car notes, etc.) get better rates than previously. These people spend less for their short-term loans,…
A lot of buyers hear that you can’t get 100% financing anymore. However, it is still possible to get 100% financing, which in short means no down payment. There are three options available to buyers for 100% financing:
1) FHA loans (one of the more popular types of loans)
2) My community (a specific Fannie Mae product)
3) Du Flex (a Traditional Fannie Mae loan)
I still do 100% financing loans on a very regular basis, and these are the main 3 options I can use. Not everyone can get approved for 100% financing. But, with it being such a good time to buy right now, these options are definitely worth considering!
Want to see if you qualify for 100% financing? Call Leah Odom with Carolina One Mortgage! You can call her cell phone at (843)…
“Indeed, as we go forward, there seems to be a lot of room for consensus and common ground for minimizing the impact of the correction on homeowners, communities, and the economy.
The notion seems pretty fundamental in this country that a prosperous, sustainable society is built on stable communities where the right to own property gives citizens a stake in the place where they live. And so it is in our shared interest to work to stabilize the communities where that stake is in jeopardy. If families have the means to own a home, it should be possible to help them stay there. If not, we should be able to find rental housing. In most cases, we should focus on affording consumers the time and flexibility to work through this crisis.
Moreover, on…
