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Pensacola Real Estate Buyers Thrown a Bone by Banks Offering Mortgages with Only 5% Down

Pensacola Real Estate Buyers take heart! It has been announced that some banks are offering mortgages with down payments as low as 5%! For those who do not have a lot of ready-cash on hand, this is fantastic news!

After the Real Estate Market tumbled, home buyers needed to come to the table with as much as 20% down or they had to turn to the Federal Housing Administration (FHA) for a low down payment loan.

But now, banks like TD Bank, Bank of America and Wells Fargo are loosening the “purse strings”, offering loans with as little as 5% down. bank of america 1

For example, TD Bank’s “Right Step” mortgage, allows borrowers to secure a loan with a 5% down payment. It also allows them to receive as much as 2% of the sale price as a gift from a third party or a relative, so they would really only need 3% down.

Market opportunity seems to be driving this change of heart.

FHA dominated the market for loans with a low down payment during the housing market down turn. Taking on all those risky loans, however, depleted the reserve’s of the agency and has forced it to increase costs.

And this year, the FHA started requiring borrowers to buy private mortgage insurance (PMI) for the life of the loan. This is an expensive proposition, that has sent many borrowers looking elsewhere to secure a loan.

Private lenders, who have been leery of taking on these risky loans, are now willing to entertain them with rising home prices. It is making it less of a gamble. Plus, the banks think they can offer a better deal than FHA.

wells fargo 1While the private lenders that are offering the 5% down loans are also requiring borrowers to buy PMI, they are only requiring them to do so until they build of 20% equity in the home.

The difference can end of being quite substantial! Paying an insurance premium over the life of a $200,000, 30-year fixed-rate loan from FHA that carries an effective mortgage rate of 4.4% (5.75% when you tack on the insurance premium), can add up to nearly $60,000 over the life of the loan.

Of course, home owners can refinance to end their FHA insurance, but rates are so low, that by the time an FHA borrower is able to refinance to a lower rate, it may not be worth it.

Please contact me here or directly at 850-393-7106, if I can help answer any questions or guide you through the home buying process.

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USDA Eligible Areas Housing Update Courtesy of Pensacola Real Estate Professionals

Benita Grotto Glenn of Prime Lendingbenita head shot Prime Lending rep in Pensacola, Florida recently sent me an email stating that Congress had passed a temporary Continued Resolution meaning that changes to USDA Rural Housing eligible areas had been delayed until mid-December.Prime Lending Logo

She issued an update as of October 22 stating that the USDA will start issuing Conditional Commitments “subject to commitment authority.”

Any Conditional Commitments issued “subject to commitment authority” will contain the following language:

USDA Eligible areas update: The “Continuing Appropriations Act, 2014” (H.R. 2775) was signed into law by the President of the United States. Therefore, barring further Congressional action, current eligible areas for USDA Rural Housing Programs will remain unchanged through January 15, 2014. (H.R. 2775 extends Sec. 731 of H.R. 933 “Consolidated and Further Continuing Appropriations Act, 2013”)

This is Great News!

During this time frame, she said, Prime Lending will allow funding on “subject to commitment authority” provisions, so that your USDA loans will close and fund as scheduled.

A USDA Loan is a home loan insured by the United States Department of Agriculture. USDA Loans offer affordable 30-year terms on real estate with 100% financing. That means: NO MONEY DOWN!!usda rural development

If your credit score meets the minimum requirements, the home being purchased is located in a USDA eligible area (such as Plantation Woods) and the household income meets the requirements, chances are you are eligible for a USDA Loan.

100 percent GW financing

For a limited time, Gulf Winds is offering 100% mortgage financing. Buyers, who qualify can now purchase a home with NO MONEY DOWN and NO MORTGAGE INSURANCE!

Shaun Schiewe Gulf Winds Mortgage Loan OfficerCristy Nash Gulf Winds Mortgage Loan Officer

This is another fabulous advantage for someone looking to buy or build a home. Not being required to have a Down Payment or Mortgage Insurace (PMI) are cost saving measures that will make the home buying experience better than ever!

Contact Shaun Schiewe, Mortgage Loan Officer at 850-479-9601 x 463 or Cristy Nash, Mortgage Loan Officer at 850-479-9601 x 473 for more information. You may also visit GoGulfWinds.com/100 for additional details.

Contact me here or call me directly at 850-393-7106, if I can answer any related USDA loan questions.

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VA Real Estate Home Loans Help Secure Pensacola Housing

VA  Home Loans help secure Pensacola Real Estate Housing for military members and their families. The City of Pensacola, home to the Pensacola Naval Air Station, Fort Barrancus and Eglin Air Force Base has a large military population.VA Home loan photo 1

I love it when I can help guide our military men and women through the home building or buying process. The VA Home Loan Guarantee Program helps veterans purchase, refinance or build homes through VA-approved lenders like Beach Community Mortgage, Quicken Loans and First Federal Mortgage.

These loans typically feature low closing costs and fewer fees than conventional loans. Packed with money-saving advantages such as no down payment requirements and no private mortgage insurance, the VA Home Loan also is designed specifically for the unique challenges facing service members and their families.

veterans photo 3Used by over 18 million families for nearly 70 years, this program has made it possible for families to experience the pride of home ownership. In today’s tough economy, the VA Home Loan program continues to shine brightly, while forging ahead with its mission of making home ownership possible for the brave men and women who serve our country.

In general, a service member is eligible for a VA Real Estate Home Loan  if he or she meets any one of these requirements:

1) Served 181 days during peace time (Active Duty)Veterans photo 2

2) Served 90 days during war time (Active Duty)

3) Served 6 years in the Reserves or National Guard

4) Is the spouse of a service member who died while in service or from a service-connected disability.

Please contact me, Lisa Burns here or at 850-393-7106, and I will be proud to help you secure a VA Loan or answer any of your related questions.

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Federal Reserve Holds Stimulus Steady Causing Mortgage Rate Dip

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The current Real Estate home buying or building landscape has received another shot in the arm!

Mortgage interest rates have fallen slightly since the Federal Reserve announced last week that it wouldn’t pare back its stimulus program.

The rate for a 30-year, fixed loan fell from 4.5% down to 4.32%, according to a weekly survey from Freddie Mac.

This represents a $21 a month savings, for example, on a $200,000 loan. This is great news for the Real Estate marketMortgage rates had been moving higher in the past few months, which analysts feared could put the brakes on any recovery going on in the real estate sector of the economy.

Mortgage rates fell following the Federal Reserve announcement that it will maintain its bond-buying stimulus,” said Frank Nothaft, Freddie’s chief economist. “These low rates should help offset the house price gains seen in the last number of months and keep housing affordable.”

In early May, interest rates had gone as low as 3.35%. However,  the Fed’s hints that it would begin to taper its bond purchases caused rates to rise more than a percentage point by late June before leveling off.

“After hearing about rising mortgage rates for months, consumers should welcome the news of a decline,” said Keith Gumbinger, of HSH.com, a mortgage information firm. “The Federal Reserve’s decision to keep its quantitative easing programs running for at least a while longer allowed mortgage and bond markets a chance to relax, at least for a little while.”

Many analysts do, however, expect the Federal Reserve to start to taper later this year, which should push mortgage rates higher.

It would be my pleasure to guide you through the Real Estate home building or buying process before rates possibly increase.

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Good News! Congress Has Extended the “Stay” for USDA

usda photoBenita Grotto Glenn of Prime Lending in Pensacola, Florida contacted me to share some great news this morning!Benita Grotto Glenn

UPDATE – Congress has passed temporary Continued Resolution meaning that changes to USDA Rural Housing eligible areas has been delayed until mid December.

What is a USDA Loan?

A USDA Loan is a home loan insured by the United States Department of Agriculture. USDA Loans offer affordable 30 year terms on real estate with 100% financing. That means no money down!

Are you eligible for a USDA Loan for the real estate you are interested in building or buying?

If your credit score meets the minimum requirements, the home being purchased is located in a USDA eligible area and the household income meets the requirements, chances are you are eligible for a USDA Loan.

What does this mean for Prime Lending and USDA Rural Housing?

Glenn said, USDA Rural Housing will continue to issue Conditional Commitments for loan transactions located in possible affected areas that are subject to change.

Because Congress passed Continued Resolution until mid-December the USDA property eligibility changes have been “delayed” until that time.  “As for the conditional commitments between now and then, they will be honored,” she said.  “We are anticipating that USDA Rural Housing will release further direction regarding exact dates and requirements for USDA Rural Housing property eligibility on or before mid-December,” Glenn said.

She said, “Prime Lending at this time does not have a required date of when Conditional Commitments must be received.  In other words it is ‘business as usual’ for USDA transactions, until further information is provided.”

The market has been improving and interest rates are still lower than 5%.Local builders, such as Timberland Contractors, LLC, D.R, Horton, Adams Homes, Celebrity Home Builders, LLC and Thomas Homes Corporation are continuing to build real estate throughout Santa Rosa and Escambia Counties.

If you have any USDA Loan questions, please contact me, Lisa Burns, Broker Pensacola Real Estate Professionals, at 850-393-7106, and I will be happy to assist you.

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