FHA rates this morning are back down to 3.75% with no points!!!
With a small seller credit towards non recurring closing costs and pre paid items, buyers can get into a home for basically the 3.5% down payment alone!
So for someone purchasing a $225000 home the $7875 down payment (which can be all gift from a relative) would really be all they need to move into the home!
The Principal & Interest payment a $225K purchase price would be $1015 per month! The additional Mortgage Insurance would be approximately $200 per month, STILL lower than a lot of people pay for montly RENT!
Wow! Check out the FHA 30 year fixed rate this week…its at a new record low of 3.5%!!!
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
Bonds and home loan rates are continuing their improving trend. I’ll be watching this closely as we head further into the new year. This is still a great time to buy a home or investment property.
So what were the results of the EU Summit? Leaders agreed to a new, tighter “fiscal integration” across the Eurozone. This means that a new treaty will be drafted, setting guidelines such as annual budget deficits being limited to 3% and failure to meet guidelines like these would automatically spark disciplinary procedures. As expected, Germany was the winner in the negotiations as they demanded a tighter fiscal union in lieu of firing up the printing press and buying troubled sovereign debt. So what does all of this mean for home loan rates here in the US? It’s important to remember that when our economy is struggling and economic reports are less favorable, our Bond Market usually benefits as the investors seek a safe haven for their money. Since home loan rates are tied directly to Mortgage Bonds, our home loan rates are sometimes at their best when our economy is struggling. In a way it makes sense…in times of economic struggle, good home loan rates can help kick start our economy in other areas. Though our economic reports have been improving of late, the Bond markets – and therefore home loan rates – have continued to benefit from the uncertainty in Europe, as investors have been staying put in the relative safe haven of US Bonds ! That’s why now remains a great time to nuy a home or investment property with home loan rates still near historic lows.
Great news, yesterday FHA’s loan limit was restored to $567,500 from the current $506,000.
As of today the lenders are still in the process of updating their systems to allow for the higher loan amounts. I imagine we should see these changes in the coming weeks.
What does this mean for you ?? Buyer’s can purchase a home up to $588,000 with just a 3.5% down payment. Seller’s listing their homes in the $500K-$600K range have a larger pool of potential Buyers !