mortgage programs

The estaterebate.com blog was created to be your source for "everything real estate." We have covered topics from low mortgage rates to green homes as well as other relevant and timely real estate issues. The estaterebate.com team is open to your suggestions about real estate topics that you would like to see covered in our blog.

We know that many people have concerns and questions about real estate. In the past, the real estate industry was not so open with its customers. In fact, real estate agents were not even required to explain an agent's true role to their clients. Many customers did not know that a real estate agent is bound by law to represent the seller. A buyer's best option is always a broker who works exclusively for the buyer.

In the 1990s, the Federal Trade Commission (FTC) regulated real estate agents to present a clear picture about their role. Since that time, the industry has been more forthcoming with answers. Yet many people are still in the dark about certain areas of real estate.

Actually, some industry experts believe that the recent housing collapse was spurred on by misinformation given to borrowers. Home buyers and sellers need access to accurate information. Many people have burning questions about the current real estate market.

'Hot' Real Estate Topics

Should I buy now while prices are favorable to buyers?

You should go ahead and purchase a home if you are ready for the commitment. Ultimately, the decision to buy a home has to be based on an individual or family's ability to handle the long term consequences. No matter how good a short term offer or benefit, home buyers have to think in terms of the future. Government incentives or low mortgage rates can be tremendous benefits to buyers who are ready to buy a home. Yet if one is just thinking in the short term, it is easy to get in over your head.

Why do housing markets vary across the US?

Most variations in housing markets are tied to the unemployment rate in the region. Generally, the real estate market is not as strong in areas of high unemployment. Yet sometimes there are exceptions to that rule.

Should I expect a slight drop in my home's value?

The current market does not favor the seller. You can probably expect a substantial drop from 2007 prices. Many sellers in today's market are not expecting the lower returns. They find it hard to believe their real estate agent's quote. A home seller can check with additional sources about local prices. Yet sellers must be prepared to make some compromises in the current marketplace.

How will real estate investors fare in the current market?

The real estate game can usually be lucrative for investors if they are involved in buying and selling. When you are playing both sides, price is not as huge a factor as for the individual home buyer or seller. Real estate investors have to keep the motion going to build profitable investments. Investors cannot afford to be stalled in the process.

Do You Have A 'Hot' Real Estate Topic Suggestion For estaterebate.com? 

Low mortgage rates translate to affordable monthly payments in the short term and substantial savings over the life of a loan. As well, low rates make home owners consider refinancing. The cost of the refinance does not seem so bad with savings in the picture.

Drop In Rates

During the past week, the rate on the 30-year fixed mortgage, the most widely-held type, fell from 4.38% to 4.28%. Within the past few days, 15-year fixed mortgage rates dropped from 3.87% to 3.85%. With similar decreases in adjustable rate mortgages (ARMS), it looks like the low mortgage rates might take some of the sting out of the economy in this post-Federal Home Buyers' Tax Credit period. The only catch is that lending guidelines are tighter than ever before and not everyone will qualify for a low rate.

High Credit Score

When it comes to credit and mortgages, the person with the highest credit score (usually 740 and higher) gets the lowest rate. Although a high credit score is not the only requirement to be eligible for a low mortgage rate, it can make a big difference. Borrowers must aim for the more favorable rate because it can make a noticeable impact on monthly payments.

A person with a 760-850 credit score could end up with a monthly payment in the range of $1500; an individual with a 620-639 score might have to pay over $1700 per month. High credit scores can mean huge savings. It is advisable for a borrower to have the best possible credit rating before he approaches a lender.

Debt-to-Income Ratio

As well as that high credit score, borrowers must have a certain debt-to-income ratio. Usually lenders insist that a borrower's overall debt does not exceed 45% of their income. Actually, debt-to-income ratio is given huge consideration in getting low mortgage rates. Even if a person's credit score is less than perfect, a sizeable income (or assets) can turn the tables in their favor.

Few Takers

Despite the low mortgage rates, you need not expect to see every ' home for sale' sign taken down in the next few weeks. Some people are taking advantage of the low mortgage rates but not everyone is taking the plunge. On the surface, low mortgages look like a deal that nobody could (or even should) resist but people worried about unemployment are not in a buying mood.

High Standards

In addition, lenders have those strict guidelines in place. The rules are not written to welcome the person with the low credit score. Of course, it does not follow that an individual with bad credit can never buy a home.

Credit Restoration

Credit repair is always an option and a restored rating can eventually open the doors to a new home. The repair process takes effort and commitment but credit restoration is worth the effort. With a good credit score, you won't miss out on opportunities such as the current low mortgage rates.

Are You Planning To Take Advantage Of The Low Mortgage Rates?

'Zero Comeback' – the title implies that nothing has come back but something has made a return appearance. The 'zero down' mortgage program has once again raised its pretty or ugly head – depending on your point of view. The question is - should there be a 'zero down' program or should there be 'zero comeback' -- no comeback for this government initiative.

Legislation that will restore the Department of Agriculture home-buying program is in the works. It is not finalized but the wheels are in motion. This program offers 'zero down' loans in specific parts of the country. Low and middle-income borrowers will be eligible for these 'no-money-down' loans.

This initiative is not a new one. 'Zero down' has already been funded to the tune of $13.1 billion but funding was exhausted earlier this year. There are passionate feelings on both sides about this program. Obviously, your opinion will depend on how you think this program impacts you.

If you are a builder, you love it. If you need a home, you welcome it. If you are an industry watcher, you worry about it. If you are a taxpayer, you might imagine another bailout in the future.

Industry observers point out how 'zero down' offers played a huge part in the housing crisis. On the other hand, the USDA defends the program and lists the guidelines to keep out buyers who appear to be bad risks. The USDA has confidence in the 'zero down' approach.

They remind us that the foreclosure rate under the previous program was less than with the Federal Housing Administration. The USDA explained some of the rules for the borrowers. They cannot make more than 115% of a county's average income. The loans are not for extraordinary amounts but it is not petty cash either as the average loan is $112,000.

Yet if anything goes wrong with these loans – and anything can and probably will – the government is backing these mortgages. Affordable mortgages might come with a cost. Maybe the taxpayer will eventually be putting much more than 'zero' dollars down to clear up the mess down the road.

Of course, government officials insist that support is necessary in these troubled economic times. The 'zero down' program has helped millions of low and moderate-income earners get homes. Without the program, they would not have been able to get a loan.

On a personal level, as a caring human being, few would argue against families getting homes. If you examine the statistics and the risks and the probabilities, however, you might arrive at a different decision. Yet as a government in a caring society, the people should trump the profit. Of course, one reason why this is a divided issue is because so many are hurting and everyone does not qualify for this help.

Expect opposition to this 'zero down' program. Some will look at it from a practical 'taxpayer' point of view. Others will see it as an unfair program. If you need it and you qualify for it, you'll be glad that 'zero down' has made a comeback.

Do You Agree With 'Zero Down' Mortgage Programs?