Buying a home in todays market

Good afternoon All,

First time home buyers have been all over the market. Many with their 1st homes under contract but now on hold. One of the best 1st time home buyer mortgage programs is the USDA Rural Development Program. However, the program has run out of funding. Now before you say, "I don't want the government to spend any more money!" Know that I am with you. That is why I am so excited about Senate Bill 3266. This bill changes the funding fee for this loan, which is charged to the borrower, a fee of 3.5% which is financed into the loan amount. This allows the program to finally be self-sufficient which means it will not need additional funds from our us the taxpayers. In addition, this rise in funding fee, since it is rolled into a 30 year Fixed rate mortgage, only changes the buyers monthly payments by a few dollars.

So the buyer, who uses and benefits from the program covers the cost of the program. Sounds logical.

We have all heard that new laws have been passed to reel in the credit card companies. Well those new laws, for good or bad take effect Monday, 2/22/2010.

Here are the details by category.

Let's start with interest rates:

In today's mortgage market PMI can be a key part to you getting a mortgage. While not all loans require PMI many do if you are putting down less than 20% of the purchase price.

PMI A.K.A Private Mortgage Insurance

It is an insurance policy which lenders often require you to have when you purchase a home with less than a 20% down payment. The insurance protects the lender but you get the priviledge of paying for it.

There are some loans that do not have PMI. USDA Rural Development loans, VA loans and some portfolio products do not require a buyer of a home to have PMI. If you are buying today your lender should be able to explain what loan is best for you, not for them, and if PMI is required they should know why and when you can get rid of it.

Some reasons why PMI might make sense:

Homeowners insurance is a necessity when you own property. I had the opportunity to speak with Theresa from The Guaraldi Insurance Agency in Lebanon, NH. When I have clients who are looking for insurance that is one of the places that I highly recommend. They have been great with my clients.

Theresa told me that if you do upgrades on your home, often you can get a discount on your homeowners policy. New roof = discount, new furnace = discount etc. Many new homeowners buy their homes,  do some upgrades and never think to ask their insurance agency for a discount.

I don't know if all companies do this but Nationwide does.

If you have The Guaraldi Agency, 603-448-3250, now and have done work on your home, you should call them. If not, check with your agency and see if they offer the same thing.