Home Loans and Mortgages

SPONSORED — Buying a home can be a confusing process. Interest rates change, there can sometimes be hidden costs to the buying process, and, how exactly do you get a mortgage anyway? Heather Hendrix from Directors Mortgage helps Pete understand the homebuying process.

While interest rates have been at near-historical lows recently, Heather says they’re starting to tick back up. “We’ve seen interest rates come up over the last six months or so,” she says. “As the economy is starting to recover, interest rates are starting to head up that way.” She adds that the federal government is trying to edge out of keeping interest rates artificially low. “I would say on a conventional loan, you’re looking at the mid-four [percent],” she says. It depends on your credit score and property value, too, she says, but Pete adds that, in the past, interest rates were around 19.5%, so four percent is very good.

If you’re looking at different types of loans, Pete says there are two main types: a conventional loan and a jumbo loan. “Conventional loan sizes are typically $417,000 and below. Anything above that is a high-performing or jumbo loan,” she says. Other loans are specific to your situation, for example, a VA loan for active duty military members or veterans. “It allows for zero down,” Heather says, “which means you don’t have to save up for a down payment.”

Other loan types, like an FHA loan, allows for a 3.5% down payment, she says, which also allows for help with down payments or closing costs. HARP loans can help those with loans backed by Fannie Mae or Freddie Mac refinance with a lower interest rate, she says, which can help people who are upside down on their homes, “even if you don’t have that equity in your home,” she says. This is only applicable, however, if you received your loan before May 31, 2009.

If you’re looking to get a loan, Heather says you should be prepared to look over your credit report in detail. You should also be aware of any potential credit issues, and Heather says she can help you look out for any credit mistakes. She also says you can help your credit score by opening a new line of credit; she suggests opening a secure credit account, which means you’ve given the bank money which you can then borrow against.

Home Matters with Pete can be heard on KIRO Radio every Saturday at 8 a.m. and Sunday at 6 a.m. or anytime at KIRORadio.com. Like Home Matters on Facebook.