Sacramento Real Estate Gal's mortgage expert Huck Ferrill has the following mortgage updates for you today:
Much has been happening lately on the residential real estate front, some well publicized, like the huge number of foreclosures, and some not so well publicized. In the last month for example, I’ve been prequalifying about a half dozen prospective buyers per day!
Entry level houses ($100,000 - $300,000 in Sacramento area) seem to be enjoying the greatest interest by both first time homebuyers and investors looking for more rental property. One of my clients, a well recognized listing agent of bank repo property, reports that the nicer homes are seeing multiple offers not long after they’re listed. So far, prices haven’t risen but, I suspect that if that trend continues, for sale inventory will drop, and prices will start to rise. This is probably a great time to be buying if you or someone you know is looking for an investment or their first home.
Mortgage news - 2008 is the year that all the low rate 3 year and 5 year fixed loans made in 2003 and 2005 will reset to higher adjustable rates, typically in the 6-7% range. Pay option ARMs also remain at relatively high rates.
The great news is that 30 year fixed loans are enjoying pretty good rates, around 5.5-5.75% depending on whether or not points are paid, and as long as the loan amount is under $417,000. Stay tuned, though-Congress may authorize an increase in that loan limit, to as high as $730,000.
More mortgage news - FHA loans are coming back big! For years, FHA loans comprised about 65% of all financing in the Central Valley, but they went by the wayside with all the “subprime” lending (now gone) that became popular. The beauty of these loans is they are fixed, very attractive rates, they are tolerant of some past credit problems and only require a 3% down payment. In fact, it’s possible to finance all down payment and closing costs so that little or no upfront money is required to buy a home! I’m processing one of these right now for a single first time buyer. Price is $127,400 for a nice little North Highlands house, total payment will be $944.00 including all property taxes and insurance. Her only initial investment in the purchase is about $200.00 toward the cost of the appraisal!
More news later as various lending reform packages move through Congress and the Administration, but one thing is sure - the chance to buy bargain homes comes every 10 years or so, and we’re there!
Also read 2008 Sacramento real estate and mortgage Predictions and feel free to give Huck Ferrill a call at 916-788-9802.
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