Mortgage Rates at Historical Lows, More Financing Options

October 8, 2011 by Danilo Bogdanovic
Filed under Mortgage/Lending

If you haven’t heard the news, mortgage rates hit new historical lows this week. Depending on the area you’re in and your credit worthiness, mortgage rates are at 4 percent, if not under 4 percent. That’s just cheap money – plain and simple.

Not only are mortgage rates at all time lows, monthly payment amounts have come down substantially since the beginning of the year. Check it out…

Mortgage payments based on the conforming loan limit of $417,000 are now 9% cheaper as compared to the start of the year:

January 2011 : A $417,000 mortgage cost $2,180.30 per month
October 2011 : A $417,000 mortgage cost $1,976.42 per month

That’s over $200 per month saved for bills, home repairs, eating out or your vacation fund.

In addition to record-low mortgage rates and lower monthly payments, lenders are beginning to increase the number and types of financing options available to borrowers.

For example, I recently received an offer on a listing and could hardly believe my eyes…the buyer’s lender letter stated the type of loan as being “100% financing, no PMI”! Now this lender letter wasn’t from just any mom-and-pop mortgage shop – it was BB&T.

I could hardly believe it so I called the loan officer to verify and get the 411 on the loan program. Here’s the scoop,

It’s a BB&T in-house program
100% financing
no PMI (mortgage insurance)
credit score of at least 660
little or no credit history OK
income cap of $84K based on the property being in Loudoun County, VA
interest rate, points and closing costs were competitive with traditional financing programs

In case you’re wondering, “What’s the catch?” (I did too)…there’s no catch. There were no “hidden fees” and no last-minute hurdles for the buyer (or seller). We settled on time with no problems. At settlement, the buyer told me they were extremely satisfied with the entire financing process.

This is just one example of how lenders are easing their restraints on financing. I am by no means saying nor wishing that lenders get as lax as they did 2003 through 2006. But I am happy that they’re getting away from the overly-strict lending guidelines of the latter part of the last decade.

With mortgage money being cheaper than ever and financing options becoming more abundant, you’ve got a lot of good things going for you if you’re in the market to sell or buy a home. If you would like to discuss your financing options in more detail, click here to contact me and I will send you names of some great lenders so you can pick their brains and see what’s available to you.

photo credit

Home Values vs. Purchasing Power