Mortgage Rates at Historical Lows, More Financing Options

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.

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Can Low Commission Hurt Your Chances of Selling Your Home?

Steve, a home seller in Williamsburg, VA posted the following question on Trulia, “Can low commission hurt my sale?” It’s obviously a hot topic because there have been 506 responses (and counting) since June 4.

Here’s my answer:

No agent/broker should ever “steer” or “sort” listings by commission amount. That harms the buyer and is therefore unethical without the expressed permission from the buyer client (in writing).

Buyer’s agents who take it upon themselves to shy away from listings that are offering less than what is written into their Buyer’s Agency Agreement with their buyer clients,

1) don’t have a Buyer’s Agency Agreement signed in the first place

and/or

2) haven’t spoken in detail with their buyer clients as to what happens when a seller/listing broker is offering less than what is agreed upon in the Buyer’s Agency Agreement.

There are plenty of ways to legally and ethically negotiate a contract to cover the difference in commission between what is being offered by the seller/listing broker and what is in the Buyer’s Agency Agreement prior to contract ratification (with the buyer via seller subsidy). Unfortunately, not many agents know how.

And if you’re wondering why many consumers don’t like Realtors, answers such as, ” Many people look though MLS email updates. Some agents secretly filter their searches so that the automated service won’t send their clients listings unless they are 3% listings. “ is one reason why. Those agents should all have their licenses revoked immediately.

Since I spoke a bit about what a Buyer’s Agent should not do, I’d also like to talk about what a Buyer’s Agent should do…

A Buyer’s Agent should be looking through every property on the market for a property that meets their buyer client’s needs regardless of the commission amount being offered by the seller. This includes properties that are “For Sale By Owner” (FSBO).

I have been asked by my buyer clients many times if they could look at FSBO properties and if I could represent them on the purchase of a FSBO property. The answer is “yes.” There plenty of ways to deal with the issue of commission and they’re all pretty simple, straight-forward and easy if you ask me.

So what’s  your response to Steve’s question, “Can low commission hurt my sale?”