Mortgage Interest Rates Have Dropped!

Let the rates drop! Well, they have. Mortgage interest rates are now at a TWO YEAR low! That is huge for buyers, who are ready and waiting to buy a home. In Phoenix, Arizona it is particularly good news because the inventory of homes is also on the rise.

The current rate for a 30-year fixed rate, conventional loan is at 3.82% with an APR of 3.94%, according to Freddie MAC. Some rates are as low as 3.62% for FHA loans, depending on your financial situation. The Mortgage Bankers Association expects the rate to continue on this path and we may even see another rate cut in the future.

Blah, blah, blah… What does that mean?

If you’re shopping for a home: Lock in your rate! With rates this low, you’ll want to try and lock it down. That will mean that you’re going to have to get serious and find a home you want to make an offer on. Buying a home now will mean that you get more property for your money and will pay less in interest over the life of the loan.

If you own a home: Check out your options for refinancing and see if it can save you money. The refinance process does cost money, so you’ll want to check that the savings is worth the cost.

If you’re almost ready to buy a home: Start getting your finances in order and talk to a mortgage broker. Then you will know what your rate would be and have a better idea on the cost to purchase a home. Your mortgage broker may also give you some homework to get you a better rate or loan.

So now that the rates have dropped, you may want to talk to a mortgage broker. I work with some of the best people in the industry, so give me a call! I can set up an introduction for you. Then they’ll work with you to accomplish your goals.

If one of those happens to be buying a home, let’s get house hunting! I would love to help you.

Talk to you soon,

Down Payment Assistance in Arizona

Down payment assistance programs are talked about a lot but some how they're still confusing! So here is some of the information about down payment assistance programs in Arizona. You DO NOT have to be a first-time home buyer to qualify for some of these programs. 

Home In 5 Program: This is the most popular down payment assistance program. 

• 640 minimum credit score. Higher credit equals more assistance. 
• Debt to Income ratio needs to be no higher than 45%
• Online homebuyers course is required.
• You can only buy a primary residence for under $370,000
• No repayment is required after 3 years of living in home as primary residence.

What do you get? Up to 4.5% cash to help you with a downpayment. Now, that is the maximum amount of assistance, keep that in mind.

• Teachers, Veterans, Law Enforcement, First Responders get an additional 1% in downpayment assistance!
• 30 year Fixed Rate Loan.
• Your APR depends on the loan type and financial data. It will be higher than market rate.

This is the most popular program in Maricopa County. I have seen buyers get almost $10,000 dollars towards the purchase of their home. That is a huge help and depending on your Realtor's® negotiating skills, you may be able to buy a home with little money out-of-pocket. 

See also: Home Plus Program or watch this video!

So if one of your dreams is homeownership, this can take you one step closer! Talk to a mortgage broker and see where your at, then give me a call! I'm here to help you get the home you want and want the home you get!

How to Get a Low Down Payment on a House

Homeownership is a goal that many people around the world share. Our desire for shelter is an innate need we have as humans. Sometimes, the only barrier to owning a home is coming up with the money down or not wanting to drain your bank account with a down payment.

Here's the most popular option for down payment assistance:

Home in 5 Advantage: this is the most used program for home buyers, offered through FHA. It offers up to 5% in downpayment assistance for eligible buyers. The requirements are that you: have a minimum credit score of 640, make less than 90k a year, buy a home less than 300K, and have a debit-to-income ratio of 45% (or better). You can use this program even if you own, or have owned a home! An 8 hour class on homeownership is also required, once you qualify for the assistance.

Bonus! If you work in a qualifying field, you may also receive an additional 1% in assistance!*

The catch? Your interest rate is going to be higher than average because you have less, 'skin in the game' so-to-speak. You will also have Private Mortgage Insurance included in your payment, that will cost you extra too. There are other administrative fees and closing costs involved, so you will still have to come up with some money out-of-pocket. However, your REALTOR® can also work to negotiate for the seller to help pay some of those closing costs. 

This assistance does not have to be repaid! Ever!

So if you need help with a down payment, don't hesitate to reach out to a mortgage broker and find out your options. They'll be able to let you know your interest rate, amount of assistance, fees, and other information; so you can get the full picture of your financial options when buying a home. Then we can search for homes within your financial comfort zone, to help you accomplish your real estate goals!

Have questions? Email me, kyle@teamclayton.com or connect with me on Facebook!

*Qualifying fields include: Veteran, Police, Fire, Nurse, Teacher, First Responder, Doctor, Military, and others. 

How to Buy a House With No Money

Well, not literally zero dollars. Unfortunately, it's rare to negotiate a deal with zero money down but it has been done. What is more common is purchasing a home with very little money down. It all depends on your financial situation, loan type, and the seller of the home you want to buy.

As a starting point, you're going to have to have $1,000 as an "Earnest Deposit". It's a way of showing that you are seriously interested in buying the property. That's going to be a part of every real estate transaction, it will credit to your sales price but it is still cash you have to come up with out-of-pocket. 

Secondly, you're going to have closing costs that range anywhere from 2% to 5% of your sales price. So, for a $100,000 home, closing costs would be $2,000 to $5,000 dollars, with the average being around $3,000. Having a REALTOR® on your side will give you the help you to negotiate a deal with those costs in mind. There are a variety of ways a REALTOR® can negotiate a deal to help you pay as little as possible. Closing costs are unavoidable but can also be gifted if that applies in your situation.

Now is the time where down payment assistance programs kick in, a popular one is the Home in 5 Advantage program. You could qualify for 2.5% to 3.5% of down payment and closing cost assistance, depending on your financial position. There is also the Home Plus program and each lender also has their own programs.

Depending on your loan, there may be other fees, costs, and rates that apply, they may even affect your monthly payment. It's important to have an open dialogue with your mortgage broker to make sure you know what fees and rates you will be charged. 

You have to balance your financial goals with your homeownership goals to find what is right for you. Focus on what is important to you—is it a certain budget, low interest rate, low out of pocket costs, or something else? Think about it, then talk with both your lender and REALTOR® so that they can help you achieve your goals.

When you choose to work with professionals, you will have a team on your side fighting for your goals. Literally. This is why using a licensed, full-time real estate agent is crucial to you buying a home with little money down. Finding the right mortgage broker is also important because they each have different styles and offer different programs, so don't be shy about shopping around.

Check out my video on down payment assistance programs for more information. 

Have any questions? Email me at Kyle@teamclayton.com or on Facebook!