With interest rates below 4% is now the right time to purchase a home?  For renters or move up buyers you should look at the numbers and see if the fit is good for you.

For example, what can you get for $100,000?  And what would your payment be?  In Meridian, Kuna and Star you could purchase a 3 to 4 bedroom, 1500 sqft (approx) home.  In Boise, it varies greatly by the area you want to be in, but you can also purchase a home of this size for $100,000.

Payment Scenario for $100,000 home:

Interest rate of 3.875% Principle and Interest payment

15 year payment                              30 year payment

7.33/$1000 = $733/mo (P&I)        4.70/$1000 = $470/mo(P&I)

Adding taxes and Insurance of approx. $150/mo

$883/mo total payment                $620/mo total payment

Most people would agree that a payment of $620/mo for a 1500 sqft home is less than what you can rent for.  Plus you get the advantage of never having your rent raised and tax advantages of being a home owner.

What if you don’t have enough money for closing costs or down payment?  You should talk to a lender about various financing options.  In Kuna and Star, you can still get a Rural Developement loan that is zero down.  You may qualify for other local neighborhood housing loans or possibly VA.  A lender can look at your situation and advise you on the best options for you.  In Meridian and Boise, FHA only requires 3.5% down.

I’ve attached a link to another article titled:  ‘Why Buy a Home’  that was written by REALTYTIMES:

http://realtytimes.com/printrtpages/20120125_whybuy.htm

For many potential homeowners NOW really could be the right time to purchase a home and lock in a fantastic interest rate for the life of your loan.

Please contact me for names of lenders that can give you the financing options for your situation.

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On November 21, 2011 I wrote a blog on the reduction of the VA Funding fee that went into effect on November 18, 2011.  The Department of Veteran Affairs issued a statement on November 22, rescinding that loan reduction.  See below:

“Purpose. On November 21, 2011, the President signed H.R. 674. Section 265 of the law raises funding fees to the pre-November 18, 2011 levels. The fees specified in Section 265 are valid through September 30, 2016”.

So the reduction in funding fees lasted only four days before they were brought back to the pre-November 18 levels. 

Here is a link to the circular:  http://www.benefits.va.gov/homeloans/circulars/26_11_19.pdf

Mortgage programs are changing constantly so be sure you have a very good loan officer to advise you on changes in programs.  If you need some names of excellent lenders, let me know and I will be happy to give you input. 

Thanks to Julie Gould at Propect Mortgage for this timely information on VA funding fees. 

After an initial delay, the reduction in VA funding fees by approximately .50-.75% will go into effect with all loans closed after 11/18.  This is good news for veteran borrowers!
 

VA Funding Fee Matrix – Purchases – Oct. 6 through Nov. 17, 2011

Type of Veteran  

Down Payment  

Percentage for  
First time Use
 

Percentage for  
Subsequent Use
 

Regular Military   Less than 5%  
5% or more (up to 10%)  
10% or more  

2.15%  
1.50%  
1.25%  

3.3%*  
1.50%  
1.25%  

Reserves/  
National Guard  
Less than 5% 
5% or more (up to 10%)  
10% or more  

2.4%  
1.75%  
1.5%  

3.3%*  
1.75%  
1.5%  

   VA Funding Fee Matrix – Cash Out Refinancings – Oct. 6 through Nov. 17, 2011

Type of Veteran  

Percentage for First  
Time Use
 

Percentage for  
Subsequent Use
 

Regular Military  

2.15%  

3.3%*  

Reserves/National Guard  

2.4%  

3.3%*  

  • ·         Loans closed on or after November 18, 2011

Funding fees for loans closed on or after November 18, 2011 will be reduced as shown as follows :

Type of Veteran  

Down Payment  

Percentage for  
First time Use
 

Percentage for  
Subsequent Use
 

Regular Military   Less than 5%  
5% or more (up to 10%)  
10% or more  

1.40%
.75%
.50%

2.80%

.75%

.50%  

Reserves/  
National Guard  
Less than 5% 
5% or more (up to 10%)  
10% or more  

1.65%  
1.00%  
.75%

2.80%

1.00%

.75%

  • Funding fees for other loans
    Funding fees for Interest Rate Reduction Refinancing Loans (IRRRLs) and Assumptions will not change. They will remain at .50%.