Norwich - Bill Walters of Colchester said he attended the region's first mortgage fair Friday in hopes he'd get a better rate on refinancing his house.
”I thought I'd see everyone in a boxing ring trying to get my business,” he said. “But everyone has the same thing. All the numbers are the same.”
Welcome to the new world of home financing, said some of the financial experts who ringed a large conference room at the Norwich Holiday Inn. As opposed to the Wild West days of mortgages just a few years ago, today's home loans are fairly standard, they said, and borrowers get no brownie points for good credit, just demerits for less than stellar repayment histories.
”Six-hundred and ninety used to be a good credit score - and we'd still be pleased to find a client with a score like that today,” said Matt Biggins, district manager for Connecticut Home Loans, a division of Prudential.
But now, because of what Fannie Mae charges lenders, banks and brokers have to charge an extra point and a half to service a loan with a good credit score, even if the borrower can come up with a 20 percent down payment, Biggins said. That would be an extra $3,000 for a $200,000 loan - or about half a percent in the interest rate such borrowers are charged on a 30-year loan, according to experts.
Matt Listro of National Credit Fixers said credit is a huge issue for borrowers today as potential homeowners try to take advantage of a new law that reduces first-time borrowers' tax obligation by $8,000 for anyone who closes on a home by Dec. 1 of this year. He advises potential borrowers to take three major steps to improve their credit: pay bills on time, pay down debt on credit cards so that no one card reaches over 30 percent of its credit limit, and have at least three to five credit cards to establish good borrowing histories.
Listro advised borrowers to know their credit score before starting the hunt for a house, because it will give them a better idea of what they likely will have to pay - most likely a bit more than the advertised lowest mortgage rate. That might not sit well with folks who think they are going to get a home loan at an interest rate of less than 5 percent, said Biggins of Connecticut Home Loans, but he pointed out that rates are still near historic lows even for those with less than perfect credit.
In fact, home loans at very attractive rates can be had from lenders such as the U.S. Department of Agriculture, which has a zero-downpayment program with no mortgage insurance required for people with low to moderate incomes, said Johan Strandson, area director for the program. The loans, currently at 4 3/8 percent interest, are targeted toward rural areas, which include most of New London County, with the exception of Norwich, New London, Groton and parts of Waterford and Stonington.
Other information available at the mortgage fair, which continues from 9 a.m. to 9 p.m. today, included foreclosure prevention, reverse mortgages, distressed-property remortgages, first-time homebuyer advice, legal advice and a property rehab program through the City of Norwich. Among those who showed up early in the day Friday were mortgage brokers, including Joanne Pendleton of Crystal Real Estate in Waterford, who said she wanted to expand her knowledge of the current home-loan market. Exhibitors said the early hours of the mortgage fair were a bit slow, but they were expecting interest to pick up.
”I'm looking to buy a house,” said Scott Wissler of Colchester, loading up on paperwork provided by the various exhibitors. “It's a good time to buy.”
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