FRI., OCT 17, 2008 -
11:44 PM
Home loans
going strong, albeit a bit tighter, in area
MARV BALOUSEK
608-252-6135
Mortgage
money remains available in southern Wisconsin to home buyers with adequate
credit, despite the national credit crunch.
"There's
plenty of money for home loans out there," said Ron Steinhofer,
manager of Marshall & Ilsley Bank's regional home
lending group. "It is slightly more difficult to qualify than two or three
years ago, but if you have a good credit score, a good job and a down payment,
money is available."
Average
mortgage rates this week in the Madison area were about 6.6 percent to 7
percent for a 30-year fixed-rate loan, according to a report prepared by Oak Bank
of Fitchburg.
Steinhofer said banks still are making loans through
programs such as Fannie Mae and Freddie Mac, government-sponsored enterprises
that were taken over last month by the federal government.
He
said that credit standards remain about the same as they were six months ago
and that home buyers can no longer get loans without verifying their income.
Some
banks now consider a FICO credit score of 720 to be excellent when the standard
used to be 700. Banks also have been less willing to make loans with higher
loan-to-value ratios. A 90 percent ratio, for example, means the loan is for 90
percent of the home's value.
Conventional
financing without a down payment has disappeared over the past six months,
although 100 percent financing still is available with Veterans Administration
and Rural Development home loans, said Joe Theisen, manager of Fairway
Independent Mortgage Corp.'s Sun Prairie branch.
Theisen
said loan volume is up 27 percent this year through August at his company,
which is licensed in 43 states.
"There's
still mortgage money available, and it's been fine in this (south-central
Wisconsin) market," he said.
One
mortgage funding source disappeared earlier this month when the Wisconsin Housing
and Economic Development Authority (WHEDA) temporarily suspended its loan
program for first-time home buyers because of an inability to sell tax-exempt
revenue bonds to finance them.
But
Theisen said loans through other funding sources remain available, including
FHA (Federal Housing Administration) loans that now require a 3 percent down
payment.
Unlike
in other parts of the country, relatively stable home values in south-central
Wisconsin have meant that fewer homeowners have mortgages that exceed what
their homes are worth.
The
2008 median home sale price in Dane County was $214,950 through August, down
about a half percent from $216,000 last year, according to South Central
Wisconsin Multiple Listing Service.
Although
some credit standards are tighter, a shortage of mortgage money hasn't been a
problem in area home sales, said John Deininger,
executive vice president of the Realtors Association of South Central
Wisconsin.
But
Theisen said the slow home sales market has made appraisals more challenging
for higher-priced homes where there are fewer comparable sales.
The
changing market also has forced at least several Madison area mortgage brokers
out of business, Theisen said, adding that the number of licensed loan
originators in Wisconsin has dropped to about 8,000 from a peak of about 16,000
three years ago.