Bargains to be found in housing market

Ready or not, there might not be a better time than now to buy a home.

Rates for 30-year fixed-rate mortgages are nearing historic lows. Other factors, including an $8,000 tax credit for first-time home buyers, little to no down payment required on some loans and for homes in rural areas, combined with market conditions that have some homeowners desperate to sell, has created a perfect storm for those ready to pounce on the housing market, local housing experts say.

As of Oct. 1, Freddie Mac reported 30-year mortgage rates averaging 4.94 percent, rivaling lows seen in May when the annual percentage rate averaged 4.91 percent.

Mortgage rates vary by state and from city to city, but some local banks are reporting 30-year fixed rates of 4.875 percent. According to the Web site bankrate.com, the nation’s average 30-year fixed mortgage rates fell from 5.12 percent last week to an average 5.11 percent this week.

“The time to buy, the magic incentive, is totally right now,” said mortgage broker Matt Rauen of Apex Mortgage in Grand Junction. “All the rates are still super low. With FHA (Federal Housing Authority) and VA (Veterans Affairs) loans, you don’t have to be a first-time buyer to get a good deal. I think (rates) are probably headed up in the near future.”

Although interest rates are low, factors that play into snagging a good rate include maintaining a good credit score and having a low debt-to-income ratio. On the heels of last year’s mortgage crisis, lenders also are requiring more thorough income documentation.

Until Dec. 1, first-time home buyers can qualify for an $8,000 tax credit. As the deadline nears, some interest groups have pushed to have the deadline extended. A decision whether to extend the credit hasn’t been made.

Home buyers with good credit scores can get 100 percent financing for homes offered through government loan programs such as Colorado Housing Finance Authority, the FHA and the VA. Homes in rural development areas such as parts of Fruita and Palisade can be purchased by qualified buyers without down payments.

“There’s a bargain element that we haven’t seen before,” said James Pulsipher, vice president of Fidelity Mortgage. “With the first-time home buyers’ credit, people see a lot of urgency to get that. There’s a lot of positive dynamics.”

Grand Junction’s housing market differs from the national or statewide snapshot. As of last month, home sales were down 42 percent compared to 2008. During the same time period, home sales were down 16 percent in Colorado.

Saving money with a good interest rate can get buyers into a more expensive home than they could afford with a higher interest rate.

“Someone who could afford a $150,000 home before, now they can afford a $170,000 home with the difference of a 1 percent rate,” said broker David Posta of Apex Mortgage. “Home values have dropped, so you’re buying more. If I could get out there and get a house, I’d do it in a heartbeat. It’s the buying time.”

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