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2012-09-27 10:52:59
RURAL IS BACK, Rates and Home Buyer Seminar!!


There is lots of good information and news in this article!

First of all, the USDA Rural Development Loan IS BACK!! For those of you who don't know about this type of financing, it is a zero ($0) down mortgage, with only 1/4 the mortgage insurance as FHA financing AND for the same interest rates as FHA. To qualify, the real estate must be located in 'Rural' areas, which for areas that I service included areas east of the Jordan River in Utah County (Saratoga Springs, Eagle Mountain), areas south of Spanish Fork (Salem, Payson, Santaquin, etc.) and many of our neighboring counties besides Salt lake County (Juab, Wasatch, etc).  There are also some income limitations and a requirement that it be the borrowers ONLY mortgage and home (can't own a second home when applying for Rural financing).

I have had dozens of clients qualify and take advantage of this amazing financing program. Rural Development financing is hand down, by far, the best mortgage option available for qualified buyers today. Nothing out of pocket, extremely low mortgage insurance and rates that would make your jaw drop (2.75% RIGHT NOW on a 30 year fixed)!!

Over this past year, it was highly anticipated that Saratoga Springs and Eagle Mountain, and likely also Payson and Salem, were no longer going to be included as qualifying areas for RD financing. The deadline that RD gave out to lenders as the cut off date for these areas was September 30, 2012, requiring all applications for these areas to be received by September 15, 2012. We were all disappointed in this change and the upcoming death of very helpful financing program/tool for first-time home buyers and young families. We rushed to help our last qualifying buyers qualify for this program and to get their files processed before the deadlines. 

But as September came around, we started hearing rumors that the September 30 deadline might be delayed. Then I received this email message below from one of my preferred lenders a few days ago:

Christmas came early this year! So there have been rumors that RDA was going to postpone their deadline for their zoning changes. The rumors happened to be true. They are going to continue to allow rural loans in our eligible areas (Saratoga Springs, Eagle Mountain, Payson, etc) to be originated until March 27, 2013. They did put a little asterisk in the wording that the date could change again, but hopefully it would be for a later date.

RDA rates are 2.75% right now for a 30 year fixed, so this is an awesome time for your clients to take advantage of a rockin program.

Lane Aldrich
Mortgage Banker  
Cell: 801-602-5746

THIS IS GREAT NEWS!! Buyers will likely still have at least 6 months to qualify for Rural Development financing in these areas. In addition, current rates for this mortgage are at 2.75 - 2875%!! If you are considering buying in qualifying areas, contact me ASAP so we can set up a plan to make sure you don't miss out on this opportunity!

On to rates:

Rates have crashed this past week, dropping almost a whole .5%. I didn't think they would ever drop below 4% (I refinanced at 4.25%), and I knew for sure that they would never drop below 3%. Well now rates are at 2.75 to 2.875% on 30 year fixed rate mortgages!! 

To see graphs showing this recent drop, you can visit MyProvoHome.com and scroll down to the graph towards the bottom of the home page, or you can click on this link to view another graph (Utah rates are about .55% below the rates quoted as the national average): http://www.bankrate.com/funnel/graph/

Here is a chart I have created to show you that this drop in rates and current rates ARE A BIG DEAL. It shows how much mortgage payments are influenced by the different rates over the past 10 years:


Loan Amount 2.75% interest (Current Rates)

3.625% interest
(2011 and 2012)

4.25% interest (2010) 5% interest (2009) 6.25% interest (2002-2008)
$100k $470 $515 $550 $600 $675
$120k $560 $620 $665 $720 $815
$150k $700 $775 $830 $900 $1,020
$200k $935 $1,035 $1,110 $1,200 $1,360
$300k $1,400 $1,565 $1,665 $1,805 $2,040

If you are considering refinancing, DO IT NOW!!This is craziness! It is unbelievable. Borrowers are going to save tens of thousands of dollars on their mortgages over the life of their loan. On a $200,000 loan, a borrower will be saving about $175/month in interest locking in on today's rate (2.75%) compared to the very low 4.25% rate of 2010/2011)! That also results in being able to purchase $30k more in home today for the same payment on the cheaper home in 2010. 

If you are considering buying a home, BUY NOW!!
Rates will go back up to 4% soon and 5-6% soon enough. You are talking about a difference of $300/month in JUST INTEREST on a $200k loan if rates go back to 5%, AND THEY WILL ... SOON!! Do not delay! Lock in these rates ASAP!!
If you are thinking about selling, SELL NOW!! Demand is going to increase and inventory is low. You will be able to sell quickly and get top dollar for your home. I will give a discount to list your home right now as I would like to increase my listing inventory and I know listings will move quickly with these rates. 
Please contact me ASAP to get things started!! 
One of my preferred lenders, Kalab Stokes, with Wells Fargo, will be putting on a home buyer class tonight covering the basics of home buying and ownership. It will be at 6pm at their main Provo building on University Ave on the 2nd floor. They will also provide pizza and drinks. It is a great class for anyone looking to better understand the process, financing and ownership. Let me know if you would like to attend and I will try to attend with you. For more details, feel free to contact myself or Kalab:
Kalab John Stokes
Mortgage Consultant
Wells Fargo Home Mortgage
86 N University Ave  |  Provo, UT  84601
MAC U1501-013
Tel (801) 418-7988  |  Cell 801-403-8756  |  Fax 877-813-2767



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