Banks Still Want Buyers
Due to fiscally tighter economic conditions, many potential home buyers are taking a more pessimistic step back when it comes to purchasing a home. Reasons for this stem from the belief that banks won’t be willing to lend money to buyers whose credit isn’t as great as it could be. However, what many buyers do not realize is that they have a lot more financing options available than they think.
In a March 2008 newsletter from the National Association of Realtors (NAR), the NAR stated that federal housing administration (FHA) loans have come back. According to the NAR, FHA loan originations saw almost a 60% increase in 2007, and currently, the program’s loan limits have been increased to a maximum of $729,750.
Additionally, tax law changes have made private mortgage insurance (PMI) more attractive. Since 2006, PMI premiums have been a deductible on federal taxes, and last year, Congress enacted a 3-year extension on PMI deductibility. This helps buyers who would otherwise be financing with piggyback loans, which are harder to get in today’s market.
Home buyers also have the option of looking into the USDA Rural Development Loan Program. I spoke to Sabrina Schell, who is a loan officer at Southeastern Mortgage Corporation, and she explained the details of the USDA Rural Development Loan Program further stating:
Rural development is a fantastic 100% financing program in a time where most 100% financing has been eliminated. It is driven by population per capita and most of the surrounding counties of Wake are eligible (all of Johnston; all of Granville; all of Franklin, etc..). There are small portions of wake that are eligible too; and while it does have income limits, they are escalated for number of bodies in a household. This is an amazing fixed rate program at market interest rates with no mortgage insurance…
Buyers Advantage wants you to know that you don’t have to miss out on the buyers market simply because of misinformation about current lending practices; 100% financing is still available to those who are looking to purchase their dream home!
For more information on Raleigh real estate, visit Buyers Advantage Group today!
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