Shop Around for a Mortgage

More than a third of home buyers say they did not shop around before selecting their mortgage lender, according to new findings from Fannie Mae’s National Housing Survey. That may mean they’re missing out in thousands of dollars in savings.

Real estate professionals, with family and friends, may be among the most influential sources of advice regarding lender selection, notes Doug Duncan, Fannie Mae’s chief economist, in a new column at Fannie Mae.

We recommend a local lender knowledgeable about the area and offers a variety of loans should be one source. The agent needs to help buyers get a lender with the right type of loan that best fits them and the subject home.

Source: Fannie Mae

Home Mortgage Rates “Hold Steady This Week”

Mortgage rates remain unchanged this week from last week, staying low and keeping home buyer affordability high, Freddie Mac reports in its mortgage market survey. 

“Mortgage rates were flat to down a little this week amid reports that inflation remains contained,” says Frank Nothaft, Freddie Mac’s chief economist. 

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 17: 

  • 30-year fixed-rate mortgages: averaged 3.38 percent, with an average 0.7 point, dropping from last week’s 3.40 average. A year ago at this time, 30-year rates averaged 3.88 percent. The record low for 30-year rates is 3.31 percent, set on Nov. 21, 2012. 
  • 15-year fixed-rate mortgages: averaged 2.66 percent, with an average 0.7 point, holding the same as last week. Last year at this time, 15-year rates averaged 3.17 percent. 
  • 5-year adjustable-rate mortgages: averaged 2.67 percent, with an average 0.6 point, holding the same as last week. Last year at this time, 5-year ARMs averaged 2.82 percent.

Source: Freddie Mac

Former Home Owners may get a “Second Chance”

Here is our  update information to share with you! Are you now starting to ask: When can we buy again? Were you foreclosed on or did a short sale due to circumstances like a job loss or illness? The wait may not be as long as they were once told! 

Many banks have guidelines that prevent them from issuing loans to people with a foreclosure or short sale in their credit history in some cases for as much as seven years. That also doesn’t factor in the damage foreclosures and short sales can do to a person’s credit score, and the work former home owners’ will need to do to repair it so they’ll have a better chance at qualifying for financing again in the future. Please contact a local lender that knows the new regulations and is recommended by your Realtor!  

The wait-time varies among lenders and government entities. For example, the Federal Housing Administration says former home owners with a foreclosure must wait three years before they can qualify, while Fannie Mae and Freddie Mac require a seven-year wait following a foreclosure. So clearify this with those helping you.  

As for short sales, sometimes these waits can be waived or drastically cut, depending on the borrower’s situation. FHA requires a three-year wait following a short sale, but it may waive that wait if the short sale was due to a job loss. 

Also, for borrowers who can come up with a higher down payment on their next home purchase, they may also not have as long to wait. For example, Fannie Mae will reduce the wait from seven years to two years for borrowers who come with a down payment of 20 percent or more. 

Source: “Lost Home to Foreclosure but Ready to Buy Again? Prepare to Wait in Lender ‘Penalty Box,’” Associated Press (Feb. 22, 2012)