Mortgage Rates and Lending Scenarios in Today’s Athens Marketplace

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One of the most prevalent questions we encounter when it comes to helping folks buy their dream home deals with financing. By and large there are lots of misconceptions about the types of loan products out there, limitations on qualifying for a loan and the amount of money needed to put down.

As part of video blog series designed to help our friends and neighbors receive maximum value from the latest real estate and mortgage information available – we spoke with Russ Tanner of Cornerstone Home Lending to help clarify some common questions.

What Types of Loans Are Available?
Consumers have access to several different types of loans and will most likely work closely with their lender to determine which suits their needs and situation best.

USDA LOANS
Designed to promote housing and development in rural areas, Rural Development loans offers some great benefits to borrowers including 100% financing. A common misconception is that the geographic limitations do not accommodate most people that want to live closer to a city. The truth is the geographic locations are not as far out as most people would imagine.

FHA LOANS
Backed by the Federal Housing Administration, these loans offer the most flexibility for buyers in that you can put as little as 3.5% down and there is added leeway in terms of credit scores and income levels.

CONVENTIONAL LOANS
Typically used by people that have little to no credit or income limitations, conventional loans are a great product for people that have money to put down on the purchase. Most borrowers are mistaken, however, when it comes to the amount down required for these loans. You can put down as little as 3% with conventional loan products, depending on your qualifications.

Though there are more loan products than the ones mentioned here, these are the most common. When you meet with your lender you will be able to customize a product to your specific needs.

Do I Have to Put 20% Down To Buy a Home?
Contrary to popular belief, homebuyers do not have to have 20% down to purchase a home. In fact, there are several loan products that are available to the general public as well as some specific loans geared toward certain buyers (such as VA loans). You can finance a home for as low as 0% down using some loan products.

How Much Will My Payment Be?
Your payment amount will largely depend on a few factors; the purchase price of your home, the amount you put down, the interest rate on the note and escrow expenses like property taxes and home insurance. But in general, there are two scenarios and they each depict the difference in payment when you have a higher sale price, a higher interest rate or both.

Assuming a 3.25% interest rate on a $300,000 home, here is an eye-opening example of how price and interest rate impact your loan:

•    If the price were raised by 5% to $315,000 the monthly payment would increase by $70
•    If the interest rates increased from 3.25% to 425% the payment would go up $180
•    If both price and interest rate were to increase the payment would go up by $260

What this means is that as a homebuyer these days you can afford to buy a lot more house for a significantly lower monthly payment amount. This will quickly change once home prices are no longer depressed and once interest rates begin to rise, which is expected to happen in the coming months and next year.


When It the Right Time to Refinance?
Existing homeowners with a current finance rate of 4.5% or above will likely save hundreds each month with a refinance. Most people believe they would not be able to do a refinance if their home is underwater but both FHA and conventional loans come with some alternatives to help you lower your payment by reducing your interest rates. The rule of thumb is that if you are 1% or more above the current interest rate it might be a good time for a mortgage audit.

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As with everything we do, we hope and expect to make your home buying experience the best possible experience for you. Please contact us today to find out how we can help make your dreams of owning a home become a reality!

706-621-6085
www.JustinWoodall.com

Keller Williams RED Day

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Every year on the second Thursday of May, real estate agents band together, put aside their work and give back to their communities. The occasion is Keller William’s RED Day and it has become a staple of the organization. The event’s mission is simple: Renew, Energize, Donate. Offices across the country use RED Day as an opportunity to get their staff together to host a blood drive, refurbish a park or find some other way to lend a helping hand.

One of the core values of The Justin Woodall Group is to donate our time to missions, organizations and charities, so Keller Williams RED Day is the exclamation point to our year-round commitment to service. This year we hosted a food drive in which we were able to raise and donate 2,860 pounds of food to the Northeast Georgia food bank. On May 9, we spent the day unloading our contributions from our truck to the food bank. Not only was this a great opportunity to give back, but every year RED Day serves as a time where our staff can step back from our busy work schedules and spend time with one another.

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If you have any questions about how you can be involved in next year's RED Day or if you have any real estate needs, please feel free to call us at (706) 612-1094 or email us at Justin@JustinWoodall.com.