Chattanooga Real Estate Blog

I know everyone is always saying it’s a great time to buy regardless of the market.  And that’s true to an extent.  But if you have been on the fence or you’ve been thinking about it now truly is the time to do it.  One of my favorite blogs has given 4 financial reasons to buy now and they hit it on the mark.

Interest rates are increasing

Rates have gone up almost 3/4 of a point in the last 6 months and are expected to continue to rise.

The 30 year mortgage may disappear

Several experts believe if Fannie Mae and Freddie Mac’s roles are eliminated, or even limited, it may bet the end of the 30 year mortgage.

Qualified mortgage requirements could be more stringent

Proposed changes include:

1.  Elimination of certain mortgage types

2.  Minimum of 20% down payment

3.  Minimum 690 FICO score

4.  Lowering of ratio of income to both the mortgage payment and the overall debt to 28% and 36%

Rents are expected to increase

Supply and demand.  The demand is increasing while the supply is decreasing.

There is a lot of inventory on the market right now.  Jump in before it’s too late or the cost is just too high.

Karen Rhodes Realtor
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Interest rates compliments of:

Mortgage South
Melanie Huddleston
1007 Ashland Terrace
Suite 104B
Chattanooga, TN 37415
423-648-7630

Conventional Fixed Rate

30 yr  =  4.25%

20 yr = 4.25%

15 yr  =  3.625%

FHA and VA

30 yr  =  4.125%

30 yr = 4.375%

Rates subject to change

Interest rates compliments of:

Mortgage South
Melanie Huddleston
1007 Ashland Terrace
Suite 104B
Chattanooga, TN 37415
423-648-7630

Conventional Fixed Rate

30 yr  =  4.%

15 yr  =  3.875%

FHA and VA

30 yr  =  4.%

30 yr = 4.25%

Rates subject to change

The Federal Housing Administration, or FHA, insures loans through its diverse programs for borrowers seeking to purchase a new home, renovate a fixer-upper, refinance their current mortgage, or make their current home more green. The flexibility offered by the program combined with its low interest rates and low cash investment makes FHA loan programs one of the easiest for borrowers to be approved for.

These have long been a favorite of first-time buyers and those with low- to middle-incomes.

Is FHA still beneficial if I’m purchasing a more expensive home?

The FHA uses a system of loan limits that vary by county. The average loan limit is $271,050 for a single-family home and $521,250 for a four-family home. But for more high-end real estate markets, such as those found around major cities, the loan limit can reach as high as $729,750 for a single-family home to $1,403,400 for a four-family home. Even for borrowers wishing to purchase a more expensive home, a FHA loan is still one of the most rewarding loan programs available. With a FHA loan, eligible borrowers will find benefits they would rarely receive with a conventional loan such as:

-Competitive interest rates

-A down payment of only 3.5%

-Regulated closing costs

-Lenient debt to income ratios

What are basic Tennessee FHA loan requirements?

Many borrowers find FHA loans are easier to obtain than conventional loans. They also come with competitive rates. While the FHA insures a portion of each loan, it doesn’t actually issue them. Borrowers will have to meet the conditions and requirements of their lender as well as those set forth by the FHA. In general, the program expects:

-2 years of steady employment without income decreasing

-a minimum credit score of 620

-a clean credit report two years after a foreclosure or after filing for bankruptcy

What other options do I have for financing?

When a borrower wishes to purchase a home for greater than the FHA loan limit in their area, they  have the option to use the FHA loan in conjunction with other financing options.

Contributed by:  Michael Blumreich

4th Quarter home sales show a gain over 2008 but lag behind 3rd quarter 2009.

In the fourth three month period of the year just ended, the Southeast Tennessee and Northwest Georgia area saw the sale of 1,527 residential units, a 19.8% increase over the same quarter’s sales in 2008, but a drop of 6.5% over the July through September sales of 2009.

Median price figures for the period witnessed a decrease to $128,500 – a drop of 4.8% from the 4th Quarter of 2008 and a statistically negligible decline of 1.2% from the previous quarter. While a positive sign, in terms of affordability, the price drop is often interpreted by some authorities as a sign of a continuing sluggish economic outlook. However, the index indicating the number of days on the market has remained remarkably consistent – from 120 a year ago to 120 in the 4th Quarter of 2009 – and only 5 days less than the 3rd Quarter.

Woo Hoo!!!!!  THDA just announced they are lowering their interest rate to 5% effective Tuesday, October 20

Great Advantage is 5.3% (2% assistance)

Great Start is 5.6% (4% assistance)