If you are anything like me, you are always looking for ways to save money … especially when it comes to a purchase as large as real estate. Most people, however, don’t realize the fees that are involved with getting a mortgage loan - fees that can quickly add up. That’s why, if you have the time, I’d recommend you take a look at a CNN/Money article titled Take a bite out of closing costs: Hold the fees please. How to save if you’re buying a new home or just refinancing. The article was written a while ago, but it still has some very valid and important points to keep in mind.

Starting on June 1st, Fannie Mae will institute a new, national policy on down payment requirements for conventional, conforming mortgages. As the announcement stated:

Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter (DU) automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of DU, in all geographic locations in the United States. The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining.

What does this mean for you? Well, it will be possible to get better terms on a loan for a new home in Contra Costa County with a smaller down payment. If you’d like, you can read the rest of the announcement on Fannie Mae’s website: Fannie Mae Announces Single National Down Payment Policy; Replaces Policy Regarding Markets Where Home Prices are Declining.

Now, I’m by no means a mortgage expert, but if you are interested in learning more about what your mortgage options are, please give me a call (925.817.8428) or send me an email (Brian@SPARRproperties.com) and I’ll put you in touch with a couple people who are.

Mortgage rates have dropped slightly this past week which will create an increase in house hunting activity. If you are interested, you can read about the decrease in rates in an article in today’s Chicago Sun-Times newspaper titled 30-year mortgage rate drops. Depending on your reasons for buying a home, the mortgage rate you get on your loan is often more important than the purchase price of the property. It is the “terms” of the purchase that dictate whether you are getting a good deal or a bad deal on a property - not the price of the home.

Probably not too surprisingly, the April foreclosure numbers in Contra Costa are higher than they were during the record setting month of March. Now, although it is a very unfortunate situation, it has created a wonderful opportunity for investors and other buyers to purchase homes at significantly reduced prices. In fact, I’m working with a number of individuals doing just that right now. So, to help give you an idea of the mindset of many investors, take a look at the recent San Francisco Chronicle article titled Timing may be right for real estate investors. If this is something you or a friend of yours may be interested in, give me a call (925.817.8428) or send me an email (Brian@SPARRproperties.com) and we can discuss it further.

The Fed cut rates again this week by a quarter percent - that makes seven cuts since mid September. With a current rate of 2%, we’ve reached the lowest percentage since December 2004. But, what does this mean for mortgage rates? Unfortunately, I talk to too many people each day that believe Fed cuts always have a positive impact on the long term mortgage rates that we, as home owners, are interested in. If you have a minute, I would recommend reading the following article: How Does a Fed Cut Affect Home Mortgage Rates by Kristin Abouelata. It talks about the relationship between mortgage rates and Fed cuts as well as highlighting the key drivers to long term mortgage rates. It makes for a quick and informative read.