Home Loans and Mortgages – One Third of Homes in U.S. Overvalued

A new study by National City Corp. looked at home values for 299 American cities and compared them to where they “should be” based on a number of economic factors that determine home prices. The results were not encouraging; homes in nearly one third of America were judged to be “extremely overvalued.” That’s the part that’s getting headlines. A complete read of the report shows that things are even worse, as 100 cities in the U.S. have values judged to be too high by 18% or more. What does this mean?

It will come as no surprise to most people that the areas judged to be the most overvalued are in California, Florida, and New York and Massachusetts. Home prices in these states have increased at a rate that far exceeds the increases in salaries in these areas. When homes are priced in a way that is disproportionate to income, they become unaffordable. The mortgage industry has come up with a number of clever solutions to this problem by introducing an ever-increasing number of creative loan products. Interest only mortgages, where buyers only pay interest on the loan, rather than principal, for the first five years of the loan, and Option ARM mortgages, with “teaser” interest rates that can run as low as one percent, have allowed people to purchase homes they otherwise would not be able to afford. Neither one of these dangerous loan types contributes any money to the actual purchase price of the home, leaving their buyers in a precarious position should prices fail to keep rising. The nationwide increase in foreclosure rates suggests that the market is probably peaking.

What does this mean for the average buyer? Home prices in the top 100 markets in the U.S. are overpriced by anywhere between 20% and 70%. Prospective buyers should realize that any home they purchase now will probably not appreciate much more in the near future, and they should finance their purchases with this in mind. Buyers should make certain that they can actually afford the purchase price and that they can afford a mortgage that will reduce the principal of the loan over thirty years. A home purchase with any other terms would have to be considered a risk, since prices are more likely to fall or stay the same in the future than they are to rise. Use some common sense when making a purchase, and all will be well.

Online Home Loans and Getting Pre Approved

A Buyers Market?

If you are just getting in the market for buying a home right now, you might be thinking that you have picked a good time. After all, housing prices are low and you have been told that it is a buyer’s market. However, that is only half of the story. Getting a home loan is harder than ever and getting a pre-approval could mean the difference between getting that dream home and watching it slip through your fingers. Sellers are not just taking the highest offer for their home; they want legitimate offers from buyers who can really qualify for the funding to buy their home. Many sellers have been, stood up, as it were more than once by buyers who, in the end, couldn’t get the financing. So before you go searching for that new home, get pre-approved with an online mortgage company, this will save you a lot of time and money in the end.

Going Through the Online Pre-Approval Process

Whenever you apply for a loan or for the pre-approval, you must show the lender all the reasons why they should be willing to lend you money. Lenders need to have as much information about your financial status as possible. They base the amount of money they will lend you and at what interest rate on the information you provide. Before you apply, get together all of your financials that verify your credit worthiness, i.e. savings, IRAs, retirement plans, stocks, assets, real estate holdings, and of course income. When applying online; you won’t need all of this information up front, the online lenders allow you estimate many of these figures in order to give you a quote. However, you will need them at some point. A good online broker will often solicit loans and quotes from several lenders. Lending Tree is a good example. Before you apply for a pre-approval on a mortgage, you need to make certain all your financials are in order. This is also the time to get a copy of your credit report and check it for inaccuracies.

An Online Mortgage Quote

Once you have applied online for a pre-approval of a mortgage, the quotes you get on the interest rate may or may not be what you actually get. They are giving you a ‘good faith’ estimate of what, given your implied credit worthiness, they can get you. There may be other factors that change it a little. The interest rate they quote you is based on current interest rates and will change until you have ‘locked’ it in. They can you usually lock the rate for you for 30 days. So, you need to find your home within that time frame. Now that you have pre-approval on a mortgage loan, finding the right home for you and convincing the seller that you are a legitimate and serious buyer is going to be much easier.

Rural Housing: Farm Labor Housing Loans And Grants

The Farm Labor Housing Loans and Grants program is a government housing loan which enables farmers to build, buy, repair or renovate housing for farm laborers. These loans can be obtained by farmers, farming associations and even public as well as non-profit organizations.

To the city dwellers, the country life always seems alluring. But the real fact is that with the constantly increasing consumer demands for farm products and shortage of funds, farmers often find it very hard to make their ends meet. For them the only option remains is to take the help of government loans. Farmers are always in need of huge funds for the improvement of their farm produce and also their property requirements. But with low earnings and hard to get finances, they find it really difficult to get adequate funds to obtain properties for their farming needs as well as their personal needs. However there are several government housing loans that provide grants to farmers to meet their construction requirements. One such program the Farm Labor Housing Loans and Grants helps farmers get loans and grants for buying properties for their farming as well as personal use.

Farm laborers are a very important part of every farm. The Farm Labor Housing Loans and Grants program provides financial assistance for the development and maintenance of housing for domestic farm laborers. Funds from this program are used for the construction, purchase as well as renovation and repair of living quarters for year-long and seasonal farm laborers, including those who work in the on-farm processing units and at aquaculture and marine agriculture centers. The funds can be used for purchasing a site or a leasehold interest in a site, and also for the construction of recreational rooms, infirmaries and day-care facilities; all for the use of the laborers. The loan can also be used for diverse activities like buying furniture for the housing or paying for the pending dues from previous loans.

According to the law only US documented farm workers can reside in these living quarters. These housing loans can be applied for by farmers, association of farmers, non-profit organizations, family farm corporations, association of farm laborers and also tribal and state government agencies. Like other government loans, those who cannot obtain loans elsewhere can get grants through this program with an interest rate dependent on the cost of Federal borrowing. Unlike other Government Loans, these funds can also be used in urban areas for farm laborers working in nearby farms. Providing financial assistance through these loans, full time farmers are given the option to tailor and modify the loans and grants as per their financial needs. But in case of seasonal workers, the loan revolves around their farming related needs like buying seeds, equipment etc.

At a nominal interest rate of 1%, the Farm Labor Housing Loans and Grants usually have a loan repayment period of 33 years. And up to 85%-90% of total development costs related to the financial needs of a farmer such as housing, buying seeds, farm equipment etc. may be covered up by these grants. Thus, through this rural housing loan, farmers can receive financial assistance to a great extent which can ultimately lead to the improvement in farm production.