As winter comes to an end, homeowners are coming out of ‘cabin fever’ with some considering a new home. Many real estate economists are predicting buyers will outnumber sellers this spring, creating a shortfall in inventory. That can mean higher prices for sellers. Most certainly higher than what home values were a couple years ago. If you are considering a move the following are facts &/or points to keep in mind pertaining to home loans.
A conventional loan amount can go up to $417,000. An amount over $417,000 falls into a jumbo loan mortgage category & typically calls for about a ½ % higher interest rate (3.25% non-jumbo loan; 3.75% jumbo loan). FHA loan amounts can go up to $271,050.
Despite the Federal Reserve’s short-term rate increase in December, mortgage rates fell last month. Interest rate are not expected to rise above 4% before May.
With an expected busy buying Spring market, which can delay closing, avoid the financial grid lock by getting pre-qualified for a home purchase. Once you have your financial house in order, consider making your mortgage application to help expedite the process. The underwriting process is the most time consuming during the process. It is not uncommon to get multiple calls requesting addition documentation to clear underwriting.
Home buyers typically need a credit score of 740 or more to secure the best interest rates, but lately many lenders will accept a 700 score, and some will take a 680 (assuming a conventional loan). FHA loans typically require a credit score of 640 or higher.
Typical interest rate lock in periods are up to 45 or 60 days depending on the loan program (FHA or Conventional loan). It is best not to use your interest rate lock in period until you have an accepted offer on a home purchase & expected to close within that interest rate lock time frame. Extended lock periods for interest rates beyond the 45 & 60 days are available at a slight premium, usually one-eighth to one-half a percentage point, depending.
For any questions pertaining to the above information or any other residential real estate questions, please feel free to reach out to me. As a trusted residential real estate professional advisor, I look forward to earning your business.