USDA Update, Tax credit deadline and Mortgage Rate Outlook for June

The last post was nearly 6 weeks ago. I know...well overdue.

The 8k tax credit...
has done what it was supposed to do and that is sell some houses. We have been extra-busy preparing you and other clients for the June 30th Closing Deadline. Many of you have asked if I think the deadline will be extended. The short answer is no. I think the lawmakers are going to see what happens with housing numbers in the next few months...and should we see a dip in the economy and housing numbers then perhaps this will get revisited. But for now, do not expect any extension. On a similar front, many of you have asked me, "Ryan, I have heard the tax credit has been extended." This is for military personnel only and for those who are currently deployed. If you fall into this category send me an email or call me and we'll see if you qualify or you can read up here.

USDA...
an out of funds on May 13th and the government run organization has not been approving (their term is issuing conditional commitments) any loans since that time. They are now going to issue approvals again but at increased funding fee in respect to previously issued commitments. The funding fee will now be 3.5% (formerly 2%) for purchases and 2.25% (formerly .5%) for refinances. To read the memo in its entirety click here.

Remember, this program has no PMI and is ZERO DOWN. Excellent for those of you looking for a low payment and down payment. Please also remember this program is both income and geographic specific. That means your household income is to be under a certain limit and the home must be located in a certain area. To learn about the income limits and geographic eligible areas you can go to our website in the USDA section and read up.

Mortgage Rates...
The FED pulled out of the Mortgage Backed Security (MBS) purchase program at the end of March. And rates quickly spiked. Then, in April we started seeing the effects of Greece and other Euro-countries who have massive debt problems start to affect the stock and bond markets of the world. This unforeseen series of events has led investors to the safe haven of bonds...and specifically in US Treasuries and Mortgages (MBS). This has benefitted us as we have seen rates return to pre-March 31 levels when the FED exited their program. In short, I do not expect rates to stay low for long. If the economy continues its slow recovery...rates have to start moving up. If your rate is 5.75% or higher it may be worth a look to see if a refinance will help you. Many clients are looking to go from a 30 year loan to a 15 year loan. Those rates can be in the mid-4% range. 30-year fixed can hover between 4.875% and 5.5% depending on credit score, down payment and loan program. Lock your rate in while you can and take advantage while the environment is right.

If you have any topics you would like me to touch on send an email and I will include in the next post.

Ryan