Rates Continue to Improve

It is a very strange market. A few days ago I commented that interest rates are nearing the bottom and that is still my position. But here we are two days before a four day weekend and rates are still improving. The markets are going to be closed Thursday and Friday and normally that alone would push rate higher.

My primary goal is to help buyers and sellers close transactions as quickly and smoothly as possible. Doing that is good for our local economy. Rates as low as they are today are creating all types of opportunities for both buyers and sellers.

Consider this, if you check out the rates on my application site you will find and FHA 30 year fixed under 5% without points. Click Here

FHA allows the seller to contribute funds for the buyer’s closing cost (payable at closing from the sale proceeds). This is a huge marketing tool that could give a seller a distinct advantage over other properties listed for sale. Consider a home selling for $200,000, a buyer could purchase with only 3.5% down or $7,000, roll the up front mortgage insurance premium into the loan amount making the loan $196,377. Based on today’s rate of 4.875% it is possible for the seller to provide a start rate of only 2.875% fixed for the first year, 3.875% for the second year and then 4.875% for the remaining 28 years!!! Cost to the seller for this example would be two points or $4,084. That is much better than a 5% reduction in the sale price, the seller would net almost $6,000 more and the buyer receives awesome payments.

STOP!! He said something other than "fixed rate" - no I didn’t. The example is a fixed rate of 4.875% for 30 years, it is temporally bought down for 2 years. And it works very well if the buyer is qualified for the payment based on the highest rate. I have closed about a kazillion of these loans over the years.

In our example above the APR is 5.843% assuming a note and payment rate of 4.875%, fixed for 30 years.

There Is Good News If You Look

There is so much negative in the headlines today that it may not be easy to find something good, but it is there if you search hard enough. Rates for example, I just posted some of the lowest rates in my career on my application web site: http://centurymortgageco.lendingstation.com/products.aspx

Folks, those are fixed rates! But some of them have points, you say!!! And we all know the late night real estate gurus tell us not to pay points. For years I have suggested that homebuyers can control the payment by how they manage the transaction from the beginning. What happens if you negotiate and have the seller pay the points on your behalf? Then it is possible to receive the new tax credit if you qualify and an additional tax deduction.
http://www.irs.gov/taxtopics/tc504.html

We are seeing the beginning of the influx of people because of the new jobs at Fort Knox, this can only be a plus for the entire region.

My company is having a bumper year; in fact a few weeks ago we surpassed the largest annual volume in the company’s history with two months to go. Rates are only partially responsible. Our staff has expanded while competitors have laid off personnel. There really is good news if you look for it.