BIG DROP IN MORTGAGE INTEREST RATES, VET LOANS OFFER LEVERAGE
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
November 30th, 2008
The interest rate for a 30-year fixed rate loan dropped more than 1% from last week. One local lender 
quoted 5.25% at last weeks MLS meeting however the state average is closer to 6%, according to the California Association of Realtors weekly news brief. Rarely do rates fall by such a large margin in such a short period of time. Financial markets have been volatile lately so this rate could jump to over 6% just as quickly as it plummeted.
During this period of financial turmoil, rates have been bouncing around from just over 5% to above 6.5% for the past month or so. The 15-year fixed rate usually follows the 30-year rate but is around 1/4% to 1/3 % lower. Lenders are not pushing adjustable rate mortgages as much anymore due to consumer fears of being susceptible to payment shock.
Reputable lenders giving quotes will advise the borrower that the final rate and terms will be based on their overall financial profile including credit score, job history, assets, liabilities and size of the downpayment. Automated underwriting, where a borrower is approved by a computer once all necessary data regarding the borrower has been inputted, will only be granted to those with excellent credit scores, generally above 720. The bottom line is these loans must make sense and expect the lender to request substantial supporting documentation from the borrower to secure the best rate and terms.
Now that the subprime loans are a thing of the past, VA loans for veterans allow the best opportunity for leveraging into a home with limited cash resources. Generally speaking, a Vet can get into a home with no downpayment and little or no closing costs. Non-veterans can find 100% financing on certain properties through specialized programs such as the USDA. Contact a local mortgage banker or broker for details on loan programs that suit your financial capabilities.
Despite news reports to the contrary, lenders have plenty of money to loan to qualified buyers.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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