Living Littleton

    Home loan rates for buyers in Littleton or Denver continue to drop.  FHA rates are about 4.25%, depending on the day you ask.  This is quite a surprise from what the experts were all predicting back at the first of the year.  If you remember, they were saying rates would start to rise in the second quarter because the Fed was going to quit buying home loans.  Most were saying rates could rise 3/4 to 1 % by the end of the year.  That would have us in the high 5’s, but we’re no where near that at the present time.  The Fed did quit buying home loans, however, there has been so much money pouring into Treasuries instead of stocks, that the price of Treasuries has been bid up.  They run counter to interest rates, so when the price of the bond goes up, the interest rate goes down.

    Today’s low rates, coupled with the supply of homes at bargain prices has made this a perfect time to buy a home in Littleton.  If you weren’t able to purchase by the end of April, to take advantage of the Federal Tax Credit, you aren’t left out in the cold.  The low rates will give you a return over what someone had to pay 5 months ago for their home loan, that will make up for the tax credit, over time.  

     Even with this perfect combination of rates and supply, home sales aren’t going through the roof.  I suspect that many wanna be buyers just don’t have the money.  If that’s your case, or you know of someone who’s faced with that issue, you may want to look at the attached loan comparison chart for a $200,000 home purchase, at the end of this post.  It’s the only Zero Down home loan available, outside of VA.  It’s a 30 year fixed rate loan that is always below market and doesn’t require any money down.  In addition to that, there are no closing cost, just pre-paids.  I’ve made reference to this loan in the past, however, I’ve never broke it out so people could see the benefits, when compared to FHA. . The first column is for an FHA loan, where the seller paid 3% towards paying buyer’s closing cost.  The second column is where the seller pays 3% to buy the rate down an additional .75%, to 3.25%.  Since there aren’t any closing cost, the buyer doesn’t need to have that money apply to his cost.  The third column is were the buyer elects to discount the price of the home by 3% and just go with the market rate on the Zero Down loan, which is 4%.

   If this is something you’re interested in, give me a call ASAP.  It takes a little longer to process these loans, as you have to attend a workshop, first, and they’re only held once a month.  I only make this loan available to my clients, so please don’t contact me if you have a relationship with another Realtor.

                                                                                    Loan Comparison

                                                                          Purchase Price $200,000

In their continuing quest to cut their losses by cracking down on sloppy underwriting for loans, Fannie Mae has instituted a new policy of ordering a second credit screening right before closing.  This last minute check will be to determine if the borrower has obtained, or even shopped for, additional credit.  It’s not unusual for Littleton and Denver new homeowners to shop for new appliances, new home furnishings, autos, new credit card, etc, however, opening these new lines  has the potential to stop the closing until the lender can do a full research and review on the borrower’s credit. 
Jerry Becker
jbeckerhomes@comcast.net

If you’ve actually taking out a new loan it may be large enough to put you over the top on your qualifying ratios.  This could kill the purchase.  Avoid the temptation to apply for a new credit when you go shopping for those home improvement items until after the home closes.  It’s OK to look, just make sure you don’t apply for credit so you’ll be ready to go when the homes closes.  Your lender can give you more information on this.

   As I mentioned in an earlier post, weakness in the Euro has caused an inflow of dollars into the bond market, resulting in some of the lowest home loan rates, ever.  Currently, Littleton lenders are quoting rates in the high 4’s for 30 year fixed rate loans.  In spite of these low rates, the number of purchase loans being applied for, is at a 13 year low.  I think much of this is caused by the market taking a breather after the expiration of the Federal Tax Credit.            
    As nice as these low rates are, no one can say how long they will last.  If our economy starts to pick up, as the talking heads all predict, we could see money leaving bonds to buy stocks.  When this happens, expect to see rates rise.
Jerry Becker
jbeckerhomes@comcast.net

    Presently, the main funding mechanism in town for buyers with limited funds has been FHA.  With the decline of the lending market, FHA has been hotter than ever.  Recently, there have been some changes that willaffect you, as a borrower.  First of all, the loan limit has been lowered to $368,000 for a single family home in the Denver Metro area.  Also, the amount required for a down payment has been increased from 3% ot 3.5%, although FHA will still allow this to be a gift from family members.  FHA now charges an up-front Mortgage insurance premium of 1.75%, which can still be added into the loan.  If you have questions about FHA financing, call me and I’ll put you in touch with several reputable lenders.

     Contrary to what you’ve been hearing, it’s still possible to buy a home with nothing down.  These are thirty year fixed rate loans with no Private Mortgage Insurance (PMI), and they are at market rate or below.  These aren’t only for first time buyers, either.  I’m one of the few Realtors in Denver that know about this program.  It’s not brokered through other mortgage brokers, so the odds are you lender hasn’t heard about it.  If you want to find out more about these loans go to www.toogoodtobetrueloans.com, then call me so you can take advantage of some of the great bargains out there.