Have questions about mortgages, interest rates, or down payments? Our friend Mona Edick is here to answer them.
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Today we are joined by Mona Edick from Bay Equity Home Loans to talk a little bit about mortgage rates. Mona has helped buyers from all over buy their first homes, second homes, investment properties, and refinance their current mortgages. Mona’s going to talk a little about the state of the mortgage market.
Right now, rates are trending upward. They’re currently around 4.5% to 5%. A majority of the programs will be at a 5% interest rate before the end of the year. What’s causing this increase? A lot of it has to do with the stable economy and the increase of the Federal Funds Rate.
With interest rates rising, buyers’ ability to buy will be affected. If someone was approved for a $200,000 home when rates were at 4.5%, they may only be approved for $180,000 at 5%. Now is an opportune time to purchase before these rates go up.
Mona’s team has programs for buyers with a 580 credit score on up. It depends on what the buyer is looking for, what kind of money they have for a down payment, and more. If you’re looking for a conventional loan, the ideal credit score is 700 or above.
For buyers in the market, a down payment isn’t always necessary. There are programs that don’t require any down payment, while conventional loans require at least 3% down and 3.5% for FHA loans.
There are several down payment assistance programs out there for buyers as well. Your credit score and debt-to-income ratio will determine what you can qualify for. There are grant programs that are truly 0% down if sellers pay closing costs.
Closing costs are typically around 3% of the sales price, but it can vary. The costs include lender fees, title company fees, Realtor fees, and state and local government fees. These are the buyer’s responsibility, but they can often be worked into the offer by your real estate agent. Each program allows up to a certain percentage of seller-paid closing costs that can be negotiated by your Realtor.
As you can see, there are lots of options out there for all kinds of buyers. Thanks to Mona for joining us and giving us all this great information. If you have any questions for her in the meantime, give her a call at (763) 614-8732.
If you have any questions for us, you can always give us a call or send us an email. We look forward to hearing from you soon.