News from the “Russian Mortgage Front”

Comments(0) By Mike Miller •May 10th, 2008

Being a loan officer these days is analogous to being on the Russian Front! The food is running out, information is sparse, and the higher ups don’t tell us anything! I know that is a bit dramatic, and I don’t really believe their is any REAL comparison, in fact I think that is kind of silly (why do we use the term Loan OFFICER anyway??).

The fact is, today we still have good mortgage loans available, so here is a quick roundup of current mortgage facts:

Fixed rates are down about .25% in rate since the last Fed rate decision, but don’t expect more rate cuts any time soon! We will probably have to wait for THIRD quarter earnings for the stock market to show sign of the recession weakness before it is declared that we are in a “technical” recession.

Adjustable rates loans will perform the best over the next two years. The average rate will be below 5% making it hard to beat for those folks who know they will not be in the home for very long.

Buyers with down payments less than 15% will probably go with an FHA program, which only require 3.5% down payment. In many cases, even in they have 10% to put down, they may use FHA because there is no “declining market” loan to value reduction. That is becoming more common among mortgage lenders, as a way to further protect themselves with borrowers who want to use low down payments. FHA rates are good, but the paperwork is enormous, time frames are longer, and debt to income ratios are more strict (more appropriate?) than what people have gotten used to.

BUT with at least 20% down, things are starting to normalize. I actually have one large lender that will allow someone to buy a Danville home up to $1,500,000 with only 20% down. The rates are under 6% for a five year fixed interest only loan.

The catch? Good job, good credit, and some money in the bank for reserves are REQUIRED.

Please call or email me directly for details on any of these scenarios.

“This is Mike Miller, signing off from the Russian Mortgage Front”

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Filed Under: Realtor Tips