Sacramento Mortgage Update

Here's another mortgage update by Huck Ferrill, our guest mortgage broker.

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 several months for example, I’ve been prequalifying up to a half dozen prospective buyers per day! Entry level houses ($100,000-350,000 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, inventory of for sale property is dropping, and prices will start to rise at some point. 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-various adjustable loans made over the past few years, are resetting to higher adjustable rates, typically in the 7-8% range. Neg am ARMs also remain at relatively high rates. If you or someone you know has one of these products and are not sure what to do next, call me direct (916) 788-9802 or fax me the note from your old closing papers. We will be happy to analyze the note’s terms and make recommendations. My direct fax is (866) 529-5052.

30 year fixed loans are enjoying pretty good rates, around 6.25-6.5% depending on whether or not points are paid, and as long as the loan amount is under $417,000. 3 year and 5 year hybrids can be had in the mid-high 5% range. Also, Congress has authorized a temporary increase to that loan limit, which offer similar rates to a max of $580,000 (Sac area) and $729,750 in the major metro areas of California.

More mortgage news-FHA loans are back in a huge way! 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! In fact, we processed one of these for a single first time buyer. Price was $127,400 for a nice little North Highlands house, total payment is $944.00 including all property taxes and insurance. That’s actually better than the rent she had been paying, and her only initial investment in the purchase was 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!