The R&R Insider

Roberto and I (Rusty) have been meaning to start this blog for about a year now, but as business picked up, we allowed it to be sidelined for a little while. But, as we are starting a new quarter, and the season for real estate sales is fully underway, I thought it would be a great time to begin issuing some updates for anyone interested in the housing market of our beautiful valley.

Two things caught our attention this week as note worthy:

First of all, interest rates have risen the past two weeks as a result of the Federal Reserve ending its 15 month purchase campaign of Mortgage Backed Securities. Because we will now need to rely on private investors to purchase these securities, many believe it will require a higher yield to entice them back into the market. Only time will tell how much this will actually effect rates in the long-run, but as for now, the good news is rates are still at extremely low levels making borrowing on a home as affordable as it has ever been. Keep in mind that the safest thing to do might be to lock in an interest rate now.

Secondly, we were surprised to find out how few buyers, and their Realtors for that matter, are aware of the FHA (Federal Housing Administration) loan program for rehabilitation and repair of single-family homes.

(http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm)

This loan, called the FHA 203(k), is one in which a person can purchase a home in substandard condition and use some of the loan funds to rehab/repair the home within the first 6 months of ownership. If during the rehab period the owner cannot reside in the property, the first six months worth of payments can be included in the mortgage balance. This program could be especially helpful to the buyers out there being out-bid on many of the very well upgraded properties for sale. The very clean, remodeled homes in the median to lower price ranges are in many cases receiving multiple offers, however the less than perfect homes in need of work (especially if conventional financing is unattainable due to condition) are receiving far less attention. This may present an opportunity for you to not only get into a home, but also to help make it the home you really desire.