Using Seller Paid Closing Costs To Purchase A Home

It's a great time to take advantage of the current low mortgage rates and low real estate prices to become a homeowner. Low money down mortgage programs can help buyers avoid having to come up with a large down payment, but there is another way to keep up front costs low - utilize seller paid closing costs.

Often, homeowners listing their home for sale will agree to pay a portion of the buyer's closing costs, generally up to a set percentage of the purchase price. Closing costs can include paying for an appraisal, home inspection, fees to the mortgage company, a title search, title insurance, fees to the escrow agent or attorney, and more. They can easily amount to three to six percent of the mortgage amount.

Learn more about this option in "Understanding Seller Paid Closing Costs", an article on ForTheBestRate.com.

How The Dodd-Frank Act May Change The Type Of Mortgage You Can Get

One key element of the Dodd-Frank Wall Street Reform and Consumer Protection Act is the Mortgage Reform and Anti-Predatory Lending Act. Aimed at protecting consumers and ensuring we never have to weather another housing meltdown this legislation imposes several restrictions on mortgage lenders and the types of loans they can offer.

One such restriction is that lenders must keep five percent of the mortgages they make on their own books for any loans that are not "qualified mortgages." Qualified mortgages, essentially plain-vanilla, less risky loans, can be fully sold to investors on the secondary market. This will quickly make it much riskier for lenders to offer loans that aren't qualified mortgages, and therefore lead to them becoming more expensive and tougher to come by for consumers.

Jumbo Loan Limits To Fall October 1

On October 1, 2011 the maximum amount for conforming jumbo loans which can be sold on the secondary market to Fannie Mae and Freddie Mac will drop from $729,750 to $625,000. In most parts of the US the conforming limit is, and will remain $417,000, but in counties with higher property values the limit has ranged as high as $729,750, and will now be limited to $625,000. Homeowners seeking to borrow more than the conforming loan limit will be required to apply for jumbo loans which generally means a higher interest rate and larger down payment (or more equity in the case of a jumbo refinance.)

How far the conforming loan limit falls will vary from one county to another based on property values in that area, with the maximum being $625,000 in the most expensive housing markets.

Homeowners whose mortgage amounts are below the current jumbo loan limit but may fall above the new limits should consider whether they would benefit from a refinance. Talk to a mortgage professional to see whether you could lower your note rate, lower your monthly payment, or go from an adjustable rate mortgage to a fixed rate mortgage while you are still able to qualify for a conforming loan.

Mortgage Rate Update - A Look At Current New York Mortgage Rates

Mortgage rates have been holding pace at the extremely low levels we've been seeing for some time now. If you've been holding off on that home purchase or refinance it's a great time to check into mortgage rates. If you're wondering what today's pricing is for your part of the country is you can find out at ForTheBestRate.com. You can also use the mortgage payment calculator on the site to see what that rate means for your monthly housing expenses.

Here is a look at New York mortgage rates advertised on ForTheBestRate.com August 3rd, 2011. Keep in mind that rates can change at any time. Please visit the site to view the criteria used in the survey and for contact information for the mortgage companies listed.

30 Year Fixed Rate Loan (0 Points)
Quicken Loans - 4.375% Note Rate, $2303 Fees in APR, 4.473% APR
Lending Tree Loans - 4.875% Note Rate, $1500 Fees in APR, 4.941% APR
Guaranteed Rate - 4.250% Note Rate, $1100 Fees in APR, 4.297% APR

15 Year Fixed Rate Loan
Quicken Loans - 3.375% Note Rate, 1.5 Points, $1553 Fees, 3.711% APR
Lending Tree Loans - 3.375% Note Rate, 3.75 Points, $1500 Fees, 4.049% APR
Guaranteed Rate - 3.625% Note Rate, 0 Points, $1100 Fees, 3.706% APR