Hartland Homes

It seems lately all we hear about is the looming financial crisis and the bail out. I was very happy to read the Journal Star’s article on Nebraska banks being ok.
It is important for Nebraskans to know that, as with the Real Estate foreclosure mess, this financial crisis is national, NOT local! The media is largely national. And although what happens on a national level does affect us to a certain degree, the biggest factor in our economy right now is the negative media!!!
Did you know that the Real Estate foreclosure mess is primarily in Nevada, California, Arizona and Florida? These are places where prices rose exorbitantly and risky loans with adjustable rate mortgages were offered. Investors were buying like crazy to flip for a profit, counting on the increasing prices and incredible demand. When they got scared and pulled out, it caused a glut of supply and prices started falling. Regular people wanting to own but not able to afford these pricy homes took advantage of loose mortgage requirements and loans with lower starting interest rates. Then, when the rates began to rise, and prices began to fall, these homeowners (who were already stretched beyond their means and a credit risk too boot) could not make their payments or refinance to get extra money!
From 2004 to 2006, subprime loans, as a percentage of all mortgages, doubled. It is only reasonable to assume that default rate on these loans would be higher than on standard loans with more conservative requirements. However, keep in mind that over 95% of these loans are not in default! You would never know!

What does all this mean for Nebraskan’s who want to get a loan to buy a home? There are still lots of options available. What is not available is “no document loans”, 80/20 (100%) loans with less than stellar credit, or loans for 125% of the purchase price. What is available? FHA loans with 3% down and reasonable credit. (this will increase to 3.5% down on 1/1/09) There is also the VA 100% loan for veterans, 100% loan available in rural areas, $15,000 down payment assistance in rural areas, and don’t forget the $7,500 tax credit!