Rates are Lower after Fed does not Taper

The government shutdown is over, but with another budget deadline looming in a couple months, it is unlikely economic data will be strong enough to warrant the Fed changing its taper tune in the near future. This also should help keep mortgage rates at relatively low levels over the next couple months.

Buyers beware, these low rates are so low because the government is artificially keeping bond rates low through its $85B / month bond buying program known as QE3. Economists such as Forbes’ Robert Lenzner believe the Fed will gradually ease out this program but cutting back $5B to $10B per month, but also state that rates will rise to an “impossible to predict level” as institutional bond investors will sell off their investments in bonds when this taper begins. This is another good reason to go ahead and buy now if you are planning to do so in 2014.

Here are a few other key items regarding mortgage loans:

• Effective November 16, 2013: Loans submitted to Fannie Mae’s Desktop Underwriter will require a minimum 5% down payment vs. 3% as it is now. With no up-front MI this is a great loan option vs. the FHA loan but some buyers may not have the sufficient funds for the higher down payment amount. If you would like the lower 3% down option we are still taking applications and running DU findings for this great loan product. Loans do not have to be closed by November 15, only have DU Approval, so there is still time to take advantage of this low down payment loan.

• Bank of England is a local lender that offers the Homepath Renovation loan. This product features 3% down, no MI, and up to $35,000 in renovation funds. This product can be used for primary, secondary and investment properties. What a great product! Email me or call for details.

• Florida’s USDA Rural Housing office is reporting 60 – 70 day turn times once they receive the file. This means home buyers and sellers can expect a 90+ day waiting period to close start to finish. FHA has a low 3.50% down payment and allows the funds to be gifted or borrowed from family members, so this is an alternative to allow buyers to buy now, closing in 3-4 weeks, rather than waiting on the USDA product.

• I also have great resources for all types of loans to include Lot and Construction Loans, Condo’s, and Commercial Properties.

Mike Tarleton
Sr. Mortgage Loan Officer
5410 E. Hwy 30-A, Suite 212

Santa Rosa Beach, FL 32459

850-866-2963 (Cell)
706-888-0980 (Cell / Text)
866-727-8521 (Fax)
NMLS: 264821
www.bankofengland.us

For informational purposes only.  Credit subject to approval, including credit worthiness, insurability and ability to provide acceptable collateral.  NMLS 418481. Member FDIC.