Just Do It!

To many it is a confusing and stressful time to consider home ownership. The press blitzes the public with stories on foreclosures, unemployment, and a volatile stock market. People ask daily, “Is now a good time to buy a house?” My response is like a former tag line from Nike, “Just Do It!” and here is why: 1) Fixed rates are still at historical lows. True rates are not at 4.5%-4.75% on 30 year loans like they were in the spring but 5.0-5.5% 30 year fixed rates are still at historic lows. In most cases the 30 year fix is the “best value” program available. Obtaining a fixed rate at or below 5.5% on 30 year fix will provide buyers a peace of mind and reduce the likelihood for the need to refinance in future. 2) House prices are deeply discounted. Recent study shows home prices a near “pre housing bubble prices” suggesting the price correction is perhaps hitting the bottom. Last year, when buyers were making offers for 75 cents on the dollar or lower, I thought they were out of touch. They were not. They were just ahead of their time. Discounted homes selling for $215,000 in the summer of 2008 are now going for $180,000 or $175,000. Seeing offers for 50 cents on the dollar on REO’s (bank owned properties) are very real. 3) If one has never owned a home or has not written off interest on their tax returns for the last three years, they should have the opportunity for a federal tax credit of $8000 and may have a state tax credit as well. In the 20 years I have been originating loans, we have never had such an incentive to “first time” home buyers. Home ownership has always provided the tax benefit of writing off interest, the opportunity to build equity in a home through principle reduction and appreciation, and a piece of the American Dream. Add the three benefits outlined above and buying a home is a “no brainer”. One of the oldest axioms from the financial arena is, “Buy low and sell high”. My advice is “JUST DO IT”. Contact a realtor to explore home buying opportunities and contact a mortgage banker for what your purchasing power is in today’s market. My advice….. “JUST DO IT”.

July 4th brings Thoughts on the Importance of VA Loans

On the eve of our Country’s Birthday, it is only fitting to salute the men and women who have served our country, allowing us the privilege to enjoy our freedom, liberties and prosperity. One small benefit to serving our country is the VA eligibility status for buying a home. Folks, it is the best loan going today. If you have VA eligibility use it….you earned it! Based on our country’s decision to utilize military force around the world, many people have VA eligibility but are not aware of the value it affords. Some veterans believe the rate is higher than other mortgage programs and others discard the VA option because of the funding fee that is typically required. The “pros” far outweigh any “perceived cons” when considering the merits of a VA loan. Yes the rate is higher but typically not much. An increase in rate is offset by the fact that a VA loan does not require monthly mortgage insurance. The funding fee can be financed into the loan so it is a minimal increase in monthly payment to finance in the funding fee over 30 years. The big benefit of a VA loan today is it requires no down payment. It is one of a handful of loans available today with 100% financing. If seller pays closing cost and pre-paids on a VA loan, the buyer may not bring any money to closing. Any money that was saved and earmarked for a down payment could be used to pay off consumer debt. So enjoy the rare opportunity VA financing allows with no down payment, no monthly mortgage insurance and an interest rate below 6%. If you have VA eligibility, grab your DD-214 or L.E.S. and get with your mortgage loan office. Examine and compare a VA loan with any other loan options available and see the benefits of using your VA benefit.