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Rate Update and USDA Loans

Strong economic data pushed mortgage rates higher last week, as nearly every report indicated the economy is recovering more rapidly than expected. The unemployment data was most exciting with employers cutting only 247,000 jobs in July, much less than the 325,000 expected, and the least in any month since last August. The Unemployment Rate actually dropped to 9.4% in July from 9.5% the month prior, the first time the jobless rate had fallen since April 2008. Housing market data was also encouraging with Pending Home Sales rising 3.6%, the fifth consecutive monthly increase. The 30 Year Fixed currently sits at 4.875% (5.054% APR) and the 15 Year Fixed is at 4.250% (4.557% APR). There will be a Fed meeting on Wednesday with no change in rates expected. The US Treasury will also be auctioning $75 billion of 3 and 10-Year notes and 30-Year bonds this week.

The US Department of Agriculture offers the Guaranteed Rural Housing Loan Program to assist home buyers in rural housing markets. This 100% financing program with no down payment and no monthly mortgage insurance premium provides affordable housing options for borrowers and families. Funds for this program are awarded through a federal grant program and could run out. Take advantage of this program while funds are still available.

Properties must be located in eligible rural areas, generally towns of 25,000 or less that are removed from an urban area. Because of the predominantly rural nature of SLO County, many areas are eligible for the USDA loan program. Use this link to determine if a property is eligible… http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11.

Income limitations are 115% of the US median. In SLO County, qualified 1-4 person households may earn annual gross income of up to $81,450. Eligible borrowers must have a minimum credit score of 620 and a maximum debt-to-income ratio of 41%. Higher DTIs and other credit issues are considered with compensating factors. There are no maximum loan amounts or sales prices. Borrowers do not have to be first time home buyers to qualify for this program.

Daniel Podesto
Central Coast Lending, Inc.
(805) 771-9870
dan@centralcoastlending.com

Written by Keith Byrd - Go to Keith's Website/Profile