FHA Home Loan Opportunities
by: Mari Takeshita
Is The Sky Falling? .. or is it really raining opportunities for home purchasing—Here is what you should know!
FHA loan applications by owner-occupants can still be routed through automated FHA systems even though nearly half of its workers are on leave during the shutdown underwriting systems. That means people are still buying homes and closing on their loans.
Here in Denver, we felt the normal slow down we have at the beginning of the school year. That happens every year! I would say it took about an extra week or two to get back on the buying and selling roll, but we are back on and I feel the pace from the amount of interest we see in our listings and the amount of calls we get from future buyers and sellers ready to put their homes on the market.
The big question is, with so many mortgages relying on some kind of government backing, what happens to secondary mortgage markets in the event that the debt ceiling is reached? Although rates on some adjustable-rate mortgage (ARM) loans are tied directly to Treasury yields –which could rise sharply in the event of a default — fixed-rate mortgages will have some cushion. That’s because despite having required billions in bailout assistance during the downturn, Fannie Mae and Freddie Mac are now generating surplus revenues from guarantee fees they charge lenders, and have been unaffected by the shutdown.
In the last many years, I can count on one hand the amount of buyers that have purchased using an adjustable rate. The positive outcome of the defaults are the amount of fixed interest rate loans that both lenders and buyers are closing for their loans. There is a silver lining!.
Investors who fund most mortgage loans by purchasing mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae (which securitizes loans insured by the FHA) may expect to see better returns on their money.
t’s amazing the amount of concern people have when they do not know the entire story. Don’t let your fears become your excuses. Ask a Realtor to give you the update of the market and start to position yourself to own your own home.
Cherry Creek Properties llc