Lock your rate --- Look at the chart it's time

Here is a chart of the 10 yr t-bill from 1962 to date..Clearly you can see that you are in a dratiscally low period. It's time to get it done - If you are going to get mortgage financing of any type for any purpose it's time to pull the trigger. Ironically, applications were at a 13 year low last week. 

Last year chart of the 10-Tbill

For those of you "playing the market" and waiting to time the interest rates just right - please review this chart. It's SOOO low for the last year and you can see we've shot up a couple of time already this year. These swings result in mortgage rates for 30 yr products to fluctuate between a 4.6% and 5.550% for a base interest rates.

Shop for a mortgage - Pick your mortgage professional - trust your mortgage professional - and you will end up happy.

You can always apply with me here.

Rate Update and Comparable Sales

Treasury yields continued their upward trend today thereby increasing mortgage rates modestly. For those of you who had not locked you rate - I suggest you take advantage of still historically low rates. Quit trying to time the market and lock the perfect rate. It does not exist.

Comparable sales are becoming a greater and greater drag of refinance and purchase transactions. As sales for existing homes continue to drag, those sales prices are further preventing some homeowners from refinancing since depressed sales, are in fact, sales.

Well those market rates are already on the way out - well there are actually already gone. The 10 yr is at 3.29 as of this post which is a 48% pop from yesterday - If yo didn't lock your loan you are out of luck on the lowest of rates. Still worth locking if you are purchasing a home - but if you are trying to time the lowest time - you missed it. Sorrym but as I always say be prepared - submit your loan NOW and wait to lock the rate when it is at it's lowest, then order an appraisal and bam you are done....DO NOT WAIT TO SUBMIT YOUR LOAN APPLICATION. If you do, you will not be ready to lock when it is time.

USDA Back but not really

Update to my earlier post. Basically the guarantee fees and rules may have changed as big lenders are no longer allowing their correspondents to originate this product - so for the time being you are out of luck if you are looking for this product.

USDA Mortgages? I thought they graded my beef not my credit.

Yes, it is the same USDA that grades and approves our meat and many other components of our agriculture industry. But in fact, USDA also offers mortgages via guarantees made to lenders both large and small. One of the key departments within USDA is Rural Development, whose mission is to bring housing, modern telecommunications, safe drinking water and a bumper crop of benefits to our country’s rural communities.



Although our government and economy have been ravaged from the mortgages originated over the last many years, government agencies are in fact trying to stabilize our housing market by providing support for capital markets, guarantees for lenders, and through government subsidized programs such as these. One of the most popular programs is the USDA Guaranteed Rural Housing Mortgage.



So what is a USDA 502 Guaranteed Rural Housing (GRH) Mortgage like anyway? It happens to be one of the only true 100% No money down purchase products on the market today. The other 100% mortgage product is the VA mortgage. Some basic qualifying guidelines are, the borrower must occupy the property, is a citizen of the country or admitted for permanent residency, does not have non-occupying co-borrowers, and will sell their existing home, if one is owned.



Some program highlights are the property must be located in eligible rural area. These are normally any town with a population of 25,000 or less – and it cannot be adjacent to a large metropolitan area. There are no loan limits and sales price limits…Yep I said it, no limits. There is a one-time USDA Guaranteed fee – and yes, you guessed it that fee can be financed. You can even roll in all closing costs if the appraisal comes in higher than the sales price.



The USDA 502 program does not require monthly mortgage insurance. This is a significant advantage over FHA financing in that respect. This savings can be as much as .55% per year and most likely more if FHA raises their monthly mortgage insurance requirement. These purchase transactions can even include new construction.



USDA even allows refinance of an existing USDA GRH loan provided there is a financial benefit via rate reduction or payment reduction. This program ONLY allows 30 year fixed rate mortgages that are fully amortized. The program allows for condominiums and PUD’s along with the standard Single Family Residence.



If you have credit issues, this program may still be for you. Although 620 credit scores and higher are preferred, 580-619 are considered with compensating such as reserves, job stability and more. Less than 580 credit scores are regarded as a much higher risk and require more due diligence then most lenders are willing to commit to in today’s market.



So is this a great program, in a word yes. Clearly 100% I hard to find and without Mortgage Insurance, makes the USDA Guaranteed Rural Housing program represents the highest amount of leverage available for a primary residence purchase on the market today.



So where do you start? Find a lender that offers USDA financing. Mortgage Lenders, Banks and even mortgage brokers have access to this program. Finding an educated Loan Officer however may pose a challenge. Since the USDA Rural program is fairly small in the mortgage landscape, your typical mortgage call center loan officer is just not going to be familiar with this loan. So make sure to do your research and feel comfortable with the person originating your loan and always check references.