Blog :: 10-2010

Making Buying a Home a Reality with FHA Loans

Have you thought about buying a home, but think the possibility is just too far out of reach?

Do you think the only way you own your own home is with 20% down? If you have thought this, don't worry, many people have. In fact, there is a general misconception that owning a "piece of the American dream" is simply out of reach for many Americans. Not true! With an FHA loan, you too can qualify for the purchase of a!

What is an FHA Loan?

FHA is the Federal Housing Administration, which is a member of HUD. Essentially, an FHA loan is a federally insured loan, so your local lender can offer you a great deal on a loan. There is minimal risk for the lender.

So what does this mean for me?

Well, first it means that you may qualify for a low down payment- 3.5% of the purchase price in fact! Also, most of your closing costs (attorney fees, mortgage origination fees, etc) can even be rolled into your loan, so you will need even LESS money at closing. This is one of the reasons that makes FHA loans so attractive to most home buyers with little cash on hand.

So What's the Catch?

Really- nothing in particular, however there are two specific things worth mentioning:

  • There are limits on the value of the home you can purchase. In Chittenden County of Vermont, for example the limit for a single family home is $318,750.
  • You will have to qualify for the loan, just like any other "traditional" loan out there. As long as you have had a steady job and a good credit score, you should have a good opportunity of qualifying for an FHA loan.

The fact is, the FHA program is a great program for people looking to purchase, although they may not have the typical 10-20% down payment available. You can qualify for a very low 3.5% down payment, and be in the home of your dreams earning equity instead of paying rent. For more information on the FHA program, visit: Contact Brad Dousevicz of Dousevicz Real Estate for more information, or to discuss your options- 802-238-9367

VT Market Activity Report - Downtown Burlington Condominiums, Homes in Essex and Essex Junction

Every time I meet with a buyer or seller of Real Estate in the local Burlington, Vermont area, I start my conversation with a brief snapshot of what is happening in the marketplace. The market isconstantly evolving, and any agent you work with should evaluate the market constantly, whether it be to price your home to sell in the least amount of time or to get the best price for a condo or home you will be purchasing. A down market is perhaps the most important time to do your research! That is why I will explore two major marketplaces today:

  • The Downtown Burlington Condominium marketplace, for the months of August-October, 2010
  • The Single Family home market place of Essex and Essex Junction of August-October, 2010

The Downtown Burlington Condominium Market

Today I will examine the downtown Burlington "Luxury" condominium market for the last few months. Typically, these are the higher priced condos in the $300,000- $1,000,000 range. To be honest, $1M sales only happen in the Burlington downtown condo market 1-2 times per year- there simply is not that great of a supply of such units that come on the market. In fact, the average sales price for condominium in the greater Burlington area for the above mentioned range for both August and Sept were $385,600 and $406,667- respectively. The average number sold for the months were: 4 in August and 3 in September. October is not over, although we have already seen 3 sales in this particular price range. The average days on the market for condos in the greater Burlington area were:

  • 71 for August
  • 120 for September
  • 98 (thus far) for October

When we compare this to the average days on themarket for similar priced homes in other parts of Chittenden County including single family homes in Charlotte, Shelburne, South Burlington, Essex, and Burlingtonpriced at the same levels, we see very similar average days on the market- 76, 116, and 101. This tells us that the Burlington luxury condominium market is performing as well as the rest of similarly priced homes in the area, albeit it is a significantly smaller segment of the market as a whole.

The Single Family Home Market in Essex

The single family home market in the greater Essex marketplace for homes priced from $300,000-$700,000 is similar inquantity of homes sold, days on the market, and average price sold as our segment just explored- the downtown Burlington Condominium Marketplace. For the number of homes sold, Essex had the following activity:

  • August- 4, with an average sales price of $385,600
  • September- 3, with an average sales price of $406,667
  • October- 3 (thus far), with an average sales price of $309,500

Average days on the market for August, September, and October were all averaging less than 110 days. This also tells us that the market in Essex is not a anomoly- it is performing as well as the greater Chittenden County Market, and lines up with even a very different market- the Luxury Burlington Condominium marketplace as well. For more information, or to explore your options, contact Brad Dousevicz at 802-879-4477 today.

Unlocking the Mysteries of Mortgage Rates

If you have been shopping for a home recently, or looking to refinance for that matter, you have probably been looking at mortgage rates pretty closely. The fluctuating rates can seem over-whelming at times. Rates can drop .1-.3 points in a matter of days if not hours. So what does it all mean? Who determines rates? How can I ensure I will get the best rate when I buy my home? These are a few of the questions we will explore today in hopes to shine some light in this somewhat mysterious segment of the marketplace. In it's simplest form, mortgage rates are tied to the US Treasury, and the amount (and rate) for which they are purchased and sold. The Federal Reserve dictates monetary policy in the US, and a subset of the reserve, the Federal Open Market Committee (FOMC) regulate the buying and selling of treasury bonds. The main goal of the FOMC is to keep prices stable, and the economy growing. Pure and simple. The main tactic they have to control this is to set the Federal Funds Rate- or, the rate that banks charge when they make a "sale" of money to a bank, for example. This rate is at the lowest level it can be- zero. This obviously contributes to the interest rate for which banks charge the consumer for such loans as home mortgages, etc. Mortgage rates get a bit more interesting when we start looking at their relationship to the overall economy, and the actions of the open market. Simply put, investors in mortgage backed securities (not bankers or mortgage lenders) are in the drivers seat when it comes to setting interest rates. In a down economy, like we are in today, investors search for bonds because the assume the Federal Reserve will cut, or keep it at zero for example, to keep the economy going. If they wait too long, they'll end up with lower yeilding bonds. Demand for these types of bonds are fairly strong right now, therefore the lenders that offer them can offer lower yields. Why would they offer higher yields if everyone wants them? They are going to pay as little as they can. This, in turn, results in lower rates for consumers. Simply put, if you want to know what may happen with interest rates, keep an eye on the Federal Reserve. If the market starts to expend, the reserve is bound to raise their rates, which will push mortgage rates for all us higher. An even better indicator for the short term is to watch the financial news, and be mindful of a return to a growing economy. If you have been on the fence with making a move to a larger home, now may be the best time to make such a move. Your dollar goes a lot longer now than it will when the economy improves. Also, any reduction in price you may take in the sale of your existing home, you are sure to make up for in the purchase of another home. A down market can work in your advantage if you stay in the market, expeciallywith mortgage rates at the historic levels they are today. Contact Brad Douseviczat 802-879-4477to explore your options.