Mortgage Discussion for the Panhandle area

What a difference a week makes. Interest rates are moving and not in our favor. This may seem like some bad news but I truly do not think rates have anything to do with our current market. Rates were up and the housing market slowed. Rates came down and the slow market continued. Rates do not sell houses, people do.

First let's look to why rates are moving up. Gas prices, need I say more? I wrote an article last year explaining rates move in accordance with gas prices and why that is so. Gas prices are a major economic factor and with $4.00 gas prices across the nation the cost of goods go up and that leads to inflation. Inflation is cured by strengthening our U.S. Dollar against foreign currency and that is done by raising interest rates. That is a simple version.

What does all this mean? Nothing in my opinion. People are scared to buy real estate by the media keeping a dark cloud over our industry. Those of us who can divert our efforts to educating the consumer that real estate is a great buy right now will win the prize. The normal customer has misconceptions that they no longer qualify for a loan and will be turn down. Others think with all they have heard on TV and in the paper that they will need $20,000.00 in cash to buy a home. All of this simply is not true and it is up to us to get the message out.

FHA rates are still below 6.5% and a customer still can buy a house for little or no money out of pocket. We do not have the minimum credit score requirements some realtors are having issues getting approved. Life is good in a troubled market for those who know how to get the positive word out that qualifying is easy and home prices have never been better.

Again I think the time has come for me to dispel some rumors about financing and create opportunities for home sales. While we see business start to pick up so do the nay sayers about financing. Let us take a look at the newest remarks I have heard and see if you have any possibilities that may have fell between the cracks.

The first big discussion is FHA and the new minimum credit score requirements. This is all false information. While the "Big Name" banks and lenders have instituted somewhere between 580 and 620 minimum credit scores, FHA has not changed guidelines and we close these deals weekly. Being a smaller lender I have the ability closing any FHA loan that can be approved regardless of the credit score. Please do not let a deal fall through due to bad information. We need every closing we can get.

The next big rumor is the Down payment assistance programs and FHA's new minimum credit scores around these. I can assure you this too is false. Using SHIPP, Nehemiah or AmeriDream is not a problem no matter the score. Just like above if the file can be approved where the down payment arrives from does not matter. FHA is trying to help people buy houses in this market and has not made the process more difficult. Just some banks and lenders who made bad decisions in the past are so tight now they cannot approve a good loan. We do not have this problem and my blog is the only way to get this information out so you do not loose a deal because of misinformation.

Rural Development has never and still does not have minimum credit scores. I know I am repeating myself but some "Big Name" banks and lenders have decided to restrict lending in this area. The good news is this is not industry wide. We can close these loans if the loan is approvable no matter the score.

The end result is plenty of mortgage loans still close with little or no money down. Using Rural Development, VA or FHA with down payment assistance. We strive to approve any customer who wants and deserves a home no matter what credit score they may show. Do you clients a service and make sure they cannot be approved before you decide not to write a contract.