Since the financial crash of 2008 and the tighter financial regulations that followed, the media has made much of tough new rules that lenders must meet when qualifying people for mortgages. But Greg Quick, senior vice president at Traverse City State Bank, encourages potential homebuyers to not be dissuaded by those reports and to check out the possibilities to own a Northern Michigan home.
“Yes, underwriting guidelines have tightened up and it’s more difficult to get a loan, but not overly so,” Quick says.
A key point for many homebuyers is to not be spooked by word of high down payment requirements for mortgages. There are widely available low-down-payment options for many types of buyers. “For first-time buyers, the government sponsored enterprises—Fannie Mae and Freddie Mac—have a 3 percent down payment program available, and if you are a veteran or can qualify for a rural development loan, you have a zero percent down payment,” Quick says.
Also working in the favor of potential homebuyers are the low interest rates available. “We are still near historic lows,” Quick says of rates in the high-2 percent to mid-3 percent lenders are offering.
Quick’s “it’s better than you might think” take on mortgage loans is especially good to hear when set against the high prices for rental homes and apartments in Traverse City and other desirable Northern Michigan towns. “Overall, with the rates this low, when you compare to a rent scenario, a fixed- rate mortgage for 30 years tends to be a very favorable comparison,” he says. And, while rents will go up over the coming years, a fixed-rate mortgage payment will not.
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