A quick update to the report we shared September 29th involving USDA’s no-down-payment loans for homes in the Birmingham and Shelby Co. area…
While USDA has announced that its loans will continue beyond the earlier announced September 30th cutoff date, the Agency now says processing of all loans is frozen because of the federal government’s October 1st shutdown.
This also means that the extension beyond September 30th is on hold, as well, until Congress gets the government going again.
If you’re wanting to buy a home with no-down-payment financing in the meantime, we’d recommend contacting some of the Lenders we know in the area who have experience helping people obtain these kind of mortgages and who know about possible alternatives to USDA.
Self-employed people who are applying for loans for home purchases are likely to be affected by the shutdown, as well. That’s because Lenders won’t be able to get tax transmittals from the Internal Revenue Service to help verify income.
If you want to buy a home in Birmingham’s Chelsea or Calera area using USDA no-down-payment financing, you may be wise to buy sooner, rather than later.
March 27th is the deadline by which earlier reports indicated that USDA would be dropping those areas from its list of eligibility.
But Gloria Jackson, a Lender with First Federal Mortgage in Birmingham who has spoken with USDA, says exactly what will happen by the end of the month remains unclear:
You can reach Gloria by calling 205-965-2167. Click here for her website and e-mail link…
And then, after glancing at the sticker, reality sets in.
Looking was fun, but the sticker reminds that—before you can actually own that new car—you’re going to have to play the “show me the money” game.
Having your funding secured for the purchase of a new home is just as important. After all, if you don’t have the money needed to make buying a home a reality, what’s the point of looking?
Having enough money on hand to pay cash for a home is great, but let’s face it … not everyone can do this.
The alternative, then, is to get a loan.
Unfortunately, a number of people looking to buy a home in the Birmingham area wind up starting the loan process the wrong way, which goes like this:
- Buyer decides to buy a home
- Buyer starts the home search, driving neighborhoods, looking at homes
- Buyer finds the perfect home (“I want it!”)
- Buyer starts envisioning the new home as theirs (“Living here will be great!”)
- Deciding to move ahead with purchase, Buyer asks Lender for a loan
- Lender looks over Buyer’s information and says, “sorry, can’t help”
- Entire process comes to screeching halt
The scenario above is a classic invitation to major Buyer disappointment.
It doesn’t have to happen this way.
Colleen and I feel strongly that the first–and most important–steps in the home buying process are to contact us as your Agents and then speak with a Lender.
By finding out how much money you can borrow before you start looking, your search will be easier, as well as more targeted to properties that fit within your price range. If there are parts of your financial background that need work, a Lender can be a good resource for charting a course for you to follow so you can be approved.
If you’re thinking of buying a home, a good Lender will answer all of your questions and make you feel comfortable with the entire process of obtaining financing. Since buying a home is the biggest purchase many people make, if you don’t have this feeling of comfort, our advice is simple: Find another Lender.
Buyers lacking some time of financial qualification may be in for a surprise, given a reality we see all the time in the Shelby Co. and Birmingham real estate market:
Sellers want some assurance that a prospective
Buyer can actually obtain needed funding.
“Show me the money.”
If you try submitting an Offer without including either a loan pre-qualification or verification of funds (if paying cash), many Sellers simply won’t deal with you.
We know of several good Lenders in the Birmingham area with a thorough knowledge of the mortgage profession, different loans, costs and how they work. These Lenders have a strong commitment to providing good service.
Fortunately, most of our Clients purchased their home the right way, having contacted us first and then following our advice on consulting with Lenders before we started helping them with their search.
As a result, they are now happy homeowners.
If you’re seeing and hearing news suggesting that you’re wiser to hold off on buying a home, a talk with folks knowledgeable about the real estate market in the Birmingham and Shelby Co. area is likely to leave you surprised, and maybe a bit bewildered.
Myth: Lenders have stopped lending.
Fact: Lenders are lending, and they have some very good loans available, depending on your situation.
Clearing up the misconceptions is why we decided to catch up with Jason Lee, a Mortgage Banker with Henger Rast Mortgage in Birmingham.
In our latest netcast, we talk with Jason about why what you may be hearing on the news doesn’t match up with what’s happening in the Birmingham and Shelby Co. market.
Click the player just below…and then get moving on buying!
…or click here if you’d like to download and listen to this interview on your personal listening device.
Want to ask Jason a question about getting prequalified? Call him at 205-271-1210, or click here to send an e-mail…
Unless you have enough cash in pocket to buy a home outright, you’re probably going to be looking to get a loan when the time comes.
And here’s some good news from the mortgage industry:
Interest rates for the Shelby Co. and Birmingham area have dropped, compared to a week ago.
Rates for 30-year fixed loans have dropped to around 4.8%, down from around 5.0% at this time last week.
Rates for 15-year fixed loans have also slipped from last week’s 4.3% range to the current 4.2%.
So, what does this mean if you’re thinking of buying a home? Simple: The cost of getting a loan is still extremely attractive.
If you’re considering buying a home in the Birmingham/Shelby Co. area and want to get the purchase financed, your best bet—even before starting to look at homes—is to start talking with a Lender. That way, you’ll be well on your way to having your financing already lined up when you find the home of your dreams!