FHA/USDA/VA and Conventional Mortgage Loan News

If you look at my previous posts, you will see that I have been saying that now is the time to buy while rates are down and values have fallen. My post about the 10 reasons for a First Time Home Buyer to get into this market explained the reasons that I though (and still think) that now is the perfect time to be buying your first home. Now, it appears that interest rates have started climbing, maybe the imperative to get into the market has become more pressing than it was in the past. The real estate market in the Eugene/Springfield area still appears to be depressed from the high point, but I am seeing more and more purchases come through which means the values are not going to stay low forever.

Over the past 10 days, I have seen rates go up over ½ percent. Exactly what does that mean in purchasing power? Let’s take a look at a possible scenario (for comparison purposes only, not a rate offer or quote):

Home Price – $250,000

Down Payment – $8,750 (3.5% FHA)

Interest Rate – 5%

Principal & Interest – $1,317.75

Interest Rate – 5.5%

Principal & Interest – $1,393.76

Difference – $76.01 Monthly

For some people, that $76 can mean the difference in buying this home or not. If your maximum principal and interest payment that you can qualify for, or feel comfortable with, is under $1320, you just went from a $250,000 purchase to $235,000.

I have especially liked some of the advertisements done by the National Association of Realtors®, but this one really hits the spot when you are looking at what fence sitting will do for you:

Will rates continue up? I honestly don’t know, but as I have said in the past, the only way you know when you have reached to bottom is when you are on the way up. It is my feeling that we have reached the bottom and we are on the way up. I just hope that you are not one that missed the opportunity ship as it sailed by. Take a look at this recent post from my friend Lori Palermo about buying your first home.  It is not too late, rates are still very attractive and I would be more than happy to discuss your specific needs. Give me a call at 541-342-7576/541-221-3455 Cell or send me an e-mail at eugeneloanguy@gmail.com.

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