Financing Real Estate

Previously I wrote about Janet in Phoenix.  Should she buy?  Should she wait?

She bought.   Or rather, she put in a contract which, after some negotiation, was accepted by the Sellers.  She’s getting the property she wants — neighborhood, size and amenities — for a fantastic deal.  Plus interest rates are so low that it’s well within her budget.

Are you sitting on the sidelines?  If so, what are you waiting for?

The National Association of Realtors is protesting an increased fee being charged by Fannie Mae.  The fee, as much as 3.25% of the loan amount, is being charged to lenders who pass on to borrowers with credit scores as ‘low as 690.’  See article by James R. Hagerty in the Wall Street Journal.

Let’s do a quick analysis.  This really makes sense.  If you have a loan amount of $200,000, then the fee would be $6,500.  And, that doesn’t include any title company, broker fees, appraiser fees, etc.  Great way to jump start economy, Fannie.

Since the average credit score nationwide is around 690, this hurts the average borrower.

Good luck to the National Association of Realtors!