In the past, Multiple Listing Service information was only accessible to real estate brokers and was in a form of a book. Agents would review this book for new listings and show them to the clients. It was perceived that agents were doing a lot of advertisement and that’s why they were worth the commissions they were charging. Lately, Multiple Listing Service became available to general public for searching the properties and even posting your home for sale without using an agent. This service is much cheaper than listing with a broker, but there is no marketing provided, other than Multiple Listing Service distributing information of the home for sale to all real estate web sites that agree to the rules and regulations set. Suddenly, new homes for sale could be visible on very many websites online without any special knowledge or skills of a seller.  This change forced many agents that did not know how to market and sell a home go to really low commissions. They started buying clients through lower fees, without providing much service to even justify the lower fees. Customers however felt the pressure on their own incomes and did not understand why in the midst of decreasing incomes from middle income families agents would keep charging high commissions.

          When buyers get home loans, banks sell these loans in bulk to large investors such as these two. Fannie Mae and Freddie Mac turn around and package these loans into bonds and try to sell them on international market. When many loans in the bundle are bad(in default), it’s impossible for those bonds to be sold, as noone is interested in buying them with really low returns and high risk. Then we have limited money to borrow. In order for us, the consumer to be able to borrow money, government is trying to save these two biggest investors. Read the details of this takeover by clicking here.

The fact is that interest rates, while important, have little impact when it comes to buying a home.  Alright, alright, I’ll admit: it’s important…but it’s not a deal-killer.

There is a fixation on what rates are doing.  A fixation on what rates will be in the future and what rates were in the past.  I’ve heard potential home buyers tell me, “I’m not sure I want to buy now because rates are ¼ percent higher now and I think I’ll wait.” I say,  “Wait for what?”  I say let’s not look at the rate but instead concentrate on what that rate actually represents … your monthly payment.

Let’s look at what an interest rate move of ¼ percent really does to a $200,000 mortgage.  Say a 30-year interest rate at 6.00 percent “jumps” to 6 ¼ percent. Shall we sit on the sidelines, thinking such a move is suddenly unaffordable?  No.  The payment on a $200,000 loan “jumps” by about $32 a month!

Now let’s get a bit more draconian and look at a ½ percent increase and the monthly payment increases by $64.  Putting that into daily financial terms, $64 is about a tank of gas. While not insignificant, it’s hardly a reason to stay on the sidelines of home ownership. Right now, buyers should have more urgency than ever. Home prices have declined enough to make buying more affordable than it’s been in recent memory and interest rates (whether at 6 percent or 6 1/4 percent) are historically low. It’s time to act.

Are rates important? Sure they are.  But are they the end-all?  Heck no.  Interest rates over the past few years have been in a very tight range, with few major swings.  Just remember what interest rates represent, your monthly payment, and pay less attention to the headlines.

You’ve watched the news and read about it in the papers. You know, the “credit crisis” and how buyers need 20 percent down in order to buy a home? And even if you found a buyer with 20 percent down, lenders aren’t making loans anyway. So, why bother, right? Wrong!

We’re right smack in the middle of what just might be the biggest disservice ever perpetrated on potential home buyers.  It seems the press just can’t get enough of all the gloom and doom in the housing industry.  The fact is that mortgage money is as available today as it was a year ago and loans are being made this very moment with little or no money down. And, no, platinum credit isn’t required.  You just need to know where to look.  Who are these lenders? They’re right down the street.

Federal Housing Administration (FHA) loans are exploding onto the mortgage scene; recent estimates are that one out of five mortgages are FHA loans. FHA loans never went away, their reemergence is a result of the collapse of the sub-prime market. FHA doesn’t technically have a minimum credit score, although, in practice, lenders won’t approve an FHA loan with a credit score below 500. But that’s a far cry from the notion that an 800 score is the only thing lenders care about.

The best part?  FHA only requires 3 percent down. 3 percent. And that 3 percent can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying.  No wonder FHA is moving up the charts!

Please contact me if you would like more information about FHA loans or help getting into your first home.

Sponsored by the Master Builders Association of King and Snohomish Counties, this tour represents some of the area’s finest new home construction in all price ranges. Whether you’re in the market for a new single-family home, condo or townhome this special free event will help you get an idea of our area’s exciting array of housing opportunities. It’s also a fun and easy way to give you ideas for the home you plan to build and maybe, find the builder that’s right for you! Contact me for the details or click here to visit Master Builders Association site.