Archive for the 'Vermont Homebuyers' Category

Mortgage Rates Remain Low in Vermont

According to the Freddie Mac Primary Mortgage Market Survey, average fixed mortgage rates have held steady in recent weeks. For five weeks in a row, average rates on 30-year fixed-rate mortgages haven’t increased over the 4 percent mark. At the same time last year, the average rate on 30-year FRMs averaged 4.46. While the 15-year FRMs held steady at an average of 3.3 percent from the week before, rates are down an average of 0.51 percent from the same time last year. Adjustable-rate mortgages, meanwhile, have also fallen to record lows.

Good News for Home Buyers

The loss of percentage points is good news for home buyers. Due to these low mortgage rates, home affordability has never been higher. And it seems as if home buyers and homeowners looking to refinance are taking advantage of this opportunity. Data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey shows that for the week starting November 28, mortgage applications were up 12.8 percent from the previous week.

An Increase in Consumer Confidence

The Conference Board Consumer Confidence Index improved from October to November―jumping from 40.9 to 56.0 percent in the span of a month. A decrease in mortgage rates and an increase in consumer confidence may help explain the recent report from the National Association of Realtors, which shows a sharp increase in pending home sales, from 84.5 percent in September to 93.3 percent in October.

Higher FHA Loan Limits

Buyers looking for a home in one of the country’s high-priced housing markets just caught a break. The recent passing of a bill reinstated the former limit of $729,750 for Federal Housing Administration-backed mortgages in high-priced areas, effectively canceling the October imposition of a $625,500 ceiling. Unfortunately, Fannie Mae and Freddie Mac backed loans won’t see an increase in line with the FHA.

The rise in mortgage applications and pending home sales means many people are taking advantage of these record-low mortgage rates. If mortgage rates remain at record lows, more Americans should regain their confidence in the real estate market.

Read on for information on affordability and to estimate monthly mortgage payments. Sign up for our monthly e-newsletter!

VA Loans in Vermont

VA Loans vs. Conventional Loans in Vermont.

A majority of Vermont homebuyers are stuck with one home financing option, which is a conventional loan. However, qualified military members have an outlet in VA loans. Both loan types cater to different needs of the homebuyer. However, there’s no telling which one suits you without knowing some of the main differences between conventional and VA loans in Vermont.

Qualified Vermont home buyers can receive no down payment loans.

Without question, the down payments are the most noticeable difference between the loan types. Due to the credit crunch and housing collapse, lenders expect down payments as high as 20 percent for a conventional loan. Vermont VA loans, on the other hand, come with a no down payment option to qualified borrowers. This means that Vermont residents can fully finance a home worth up to $417,000.

Vermont VA Loans offer no prepayment penalties.

Prepayment penalties are yet another notable difference. There are no prepayment penalties with Vermont VA loans. Prime mortgages do not always come with such penalties since borrowers can avoid them or never hear about the option. On the other hand, subprime mortgages are more likely to come with prepayment penalties. Agreeing to this penalty means getting a lower interest rate on a traditional loan, but prevents borrowers from paying at a faster pace.

Interest Rates on VA loans in Vermont are negotiable.

When it comes to interest rates, VA loans in Vermont come with negotiable rates. This is due to the Department of Veterans Affairs’ guarantee on up to 25 percent on every loan. Active-duty homebuyers get capped interest rates, and VA loan borrowers have refinancing options that can lower interest rates. Conventional loans set interest rates based on market fluctuations, the length of your loan, and the type of mortgage. Fixed-rate or adjustable-rate mortgages should be examined with a loan officer who truly understands your needs and financial capabilities.

Private Mortgage Insurance does not apply for VA loans.

VA loans in Vermont do not require private mortgage insurance, whereas conventional loans with down payments of less than 20 percent have this extra monthly cost. Although VA loans come with a VA funding fee that starts at 2.15 percent of the loan value for first-time borrowers in the program, there is an option to build this tiny cost into monthly payments. The fee keeps the program solvent, allowing other service members and veterans to capitalize on their VA loan benefit.

Check your eligibility for a Vermont VA Loan.

Not all military members are eligible for the program. Generally, if you fall into one of three groups, you may be eligible: 1.) Military members who served on active duty for 90 days during wartime or 181 days during peacetime. 2.) Reservists and National Guards members who served for at least six years. 3). Spouses of those who died in the line of duty or as a result of a service-related injury. Lending practices are more lenient for VA loans compared to conventional ones. Imperfect credit, a foreclosure or bankruptcy and debt-to-income ratios as high as 41 percent are acceptable.

To find out if you are eligible for a Vermont VA loan, complete a Certificate of Eligibility (COE).

Today’s market may be changing for first-time home buyers.

There seems to be some new guidelines to follow and financing has become much more difficult for those parties putting less money down to purchase. We have seen the financing piece become difficult not only for first-time home buyers but the move-up buyer as well. A recent article on Yahoo Finance talks about new rules that are making it more difficult to obtain financing. New Rules for First-Time Home Buyers.

Financial Future for Home Buyers

We have seen the financing piece become difficult not only for first-time home buyers but the move up buyer as well. Banks and mortgage companies have changed the game and are no longer offering unrealistic deals for buyers. It is back to the basics almost to the point that it seems like they are being too conservative with their guidelines in some instances.

If you are a first-time buyer and would like to discuss your home buying options, contact us with your questions and we’ll be happy to walk you through a stress-free buying process.

Ok, so now I have your attention. What I am referring to, is for first-time buyers to put a home under deposit and take advantage of the government’s $8,000 tax credit. If you don’t put something under deposit within that time period, you may not have time to get the property financed and closed by December 1st. If you don’t close by that date the offer expires and you have lost out on a wonderful opportunity. So, therefore, the clock is ticking and decisions need to be made. If you need help, just drop me a line. Brian

If you haven’t pulled the trigger on purchasing your first home and take advantage of the $8,000 tax credit, the clock is ticking. Unless they extend the deadline, which I don’t think they will, you have until December 1st to close on your first home in order to be able to take advantage of this golden opportunity. There are not too many times in your life that you are presented an opportunity like this one, so that is why it is important to get out there now and get going. Call your local mortgage professional first and then drop me a line. We can make your dreams come true. Brian