Friday, February 3, 2017, AM | Leave Comment
In 2017, the only predictions that are sure things are about housing is there is a new president, and home sales will accelerate.
It is unsure if mortgage rates will go down with Trump in office. With companies already announcing their return to American soil and more to come, people will buy houses, but banks control the interest rates, not the executive branch.
In 2016 rates were low throughout the entire year with one slight spike. Still, they are quite low. In fact, they are low by historical standards, which means now is the time to buy or refinance in case they rise.
It is unlikely interest rates will reduce because there is not a lot lower for them to go.
Here are four unconventional secrets to getting a good term on your mortgage.
FHA Allows You to Get a Loan with Imperfect Credit
The average credit score for a regular buyer being financed by the bank is 753, but the insured loans from the Federal Housing Administration (FHA) are appealing to people with lower scores, especially to people with lower scores who are actively improving them.
If your credit score is over 580, you can get an insured mortgage and you only have to put down a 3.5 percent payment.
Scores between 500 and 579 require at least 10 percent down with an FHA mortgage.
Still, it is possible to buy a home with historically low interest rates without have a 753 credit score.
Save or Refinance with a 15 Year Mortgage
15 year mortgages have lower interest rates than 30 year mortgages. Also, your time making interest payments is cut in half.
Although your monthly payment is higher, your total interest is lower, and you do not have to pay it as long.
Get a Zero-Down VA Loan
Many combat veterans would like to settle down in small communities, and many small, quiet places offer beautiful homes for affordable prices because smaller areas are cheaper than larger cities.
For example, it would be easy to get a mortgage backed by the VA to live in a community similar to Lee’s Summit, MO. If you like that particular locale, Roger Deines Real Estate Group ReeceNichols could help advise you on getting the best terms on your mortgage.
According to the Mortgage Bankers Association, about an eighth of mortgages were secured by the VA.
Many home-buying vets are not even aware of their VA loan benefit, and it’s possible that a lot of active-duty personnel are not aware they are eligible for VA loans.
Be Patient During Underwriting
This may seem easier said than done, but keep your finances steady from the moment you apply for a mortgage until you close the loan.
Do not run up your credit cards for purchases for your new home, and you should not apply for new credit during the underwriting process.
The reason is because your credit score is checked prior to the underwriting, and it gets checked again before the loan is closed.
If things look erratic, you may get denied your loan. This is hard for first-time buyers, but looking boring during underwriting is a great and understated tip.
These tips were chosen because they were not the cookie cutter, conventional advice you have probably seen on a thousand different websites.
Again, this is the best time to buy. Take advantage of the interest rates and get a house or refinance before the opportunity for low interest runs out because it will.
Anica Oaks is a Freelance writer and web enthusiast. Read some of her published work on her Google+ page.