2015: A New Home for the New Year

Hello Hampton Roads,

I hope everyone's New Year is off to a great start and if you are in the market to buy a home this year, I predict it will be a very good year for you!

Why, you ask?  2 Reasons

1) Interest Rates are still quite low --about 4% for a 30 year fixed according to BankRate.com

2) There are a few no down payment and low down payment options available for today's home buyers.

First let's talk about interest rates.  There have been many predictions that interest rates will rise this year by the 3rd quarter or end of the year.  Rates may or may not rise depending on the action of the Fed should they decide to raise the Federal Funds Rate. This is the interest rate that banks charge each other to borrow money and is currently set at .25%.  (Wouldn't it be great, if we could borrow money at that rate?!)

However, according to the latest press release on 12/17/14 , the voting members of the Fed decided to keep to the status quo and not raise the Federal Funds Rate which ultimately affects the interests rates you pay. It seems that the temperament of the majority of board members is not to raise rates which is helpful if you need to borrow money!

Next, on to the no and low down payment options for buyers. Please remember that it is best to consult with a knowledgeable lender regarding specific requirements to needed to qualify as well as to discuss the best loan options for you.

Please note that these loan products are available for owner occupant buyers only (not investors) and typically for first time home buyers or those who haven't bought a home within the last 3 years.

Low Down Payment Options 

  1. FHA requires 3.5% down, usually has good interest rate, and can have lenient qualifying criteria (some lenders will approve an FHA loan with a credit score as low as 580.
  2. Freddie Mac has it's Home Possible mortgages which is a conventional loan at 97% financing and  requires 3% down. 
  3. Fannie Mae also has its own product financing 97% and requiring 3% down though its standard offering or My Community Mortgage product.

No Down Payment Options

  1. For active duty military, veterans and eligible service members, the VA loan is a popular choice offering 100% financing with 0% down. In addition to the low interest rates the VA loan has, another benefit is that there is no limit to the amount of closing costs assistance a seller may pay on behalf of the buyer.
  2. For Virginia Residents, qualified buyers may get an FHA plus loan (FHA VHDA)  which can financing 100% or 101.5% financing depending on the borrower's credit score.  The FHA plus loan is actually 2 loans--an FHA loan at 97.5% financing and VHDA loan which covers 3.5%  or 5.0% for qualified buyers with a credit score of 680+.

If you have any questions about the home buying process and/or would like assistance in getting pre-approved for a mortgage, please feel free to contact me. I look forward to hearing from you!

Thanks for Reading,

View Liz Schuyler- CDPE, SFR, e-PRO's profile on LinkedIn _________________________

Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+


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