Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, May 16, 1993                   TAG: 9305180189
SECTION: AMERICAN HOME WEEK                    PAGE: 11   EDITION: METRO 
SOURCE: By ANNE PIEDMONT
DATELINE:                                 LENGTH: Medium

LOW INTEREST RATES EXPECTED TO HOLD STEADY FOR A WHILE

Pilarski, and everyone who works in the home mortgage field, has been kept busy by home buyers and refinancers trying to take advantage of the rates. She said both groups seem to believe the rates have bottomed out and want to lock in rates at their lowest, so currently there is a lot of activity for the mortgage companies.

Others, like Pilarski, have seen mortgage companies add additional staff and longer hours to be sure that the loan applications are processed in as little time as possible.

Pilarski suggests that one way the buyer can expedite the loan application process is to ask his REALTOR or loan officer to pre-qualify him for a mortgage. There are computer software packages available which enable the buyer to determine how large a loan he can qualify for so the buyer knows, up front, what price house he can afford. Pre-qualifying with your REALTOR or loan officer also allows some of the paperwork to be processed ahead of time and takes the guesswork and uncertainty out of the process.

When shopping for the lowest rates, Pilarski said, the easiest route is to follow your REALTOR's advice. He or she probably has a long-standing relationship with several lenders, but, she noted, the buyer also has the right to check around for the best rates. Borrowers might find that mortgage brokers may tend to be a bit more competitive than banks because mortgages are their only source of income; however, borrowers should consider a number of options.

Slightly lower interest rates also may be found in VA and FHA loans. VA loans are tailored for armed services veterans and those who have served in the National Guard or Reserve. They allow the buyer to purchase a home with no down payment and the seller to pay all closing costs and points. In other words, a VA loan lets the buyer get in a home with no money down if the seller is willing to pay the costs for the purchaser.

The FHA loan which is for all purchases and allows the buyer to get in a home with a smaller down payment than a conventional loan would require. The trade-off, however, may be additional mortgage insurance premiums.

Both types of loans should be considered, Pilarski said, since the "rates are just a hair better" than some other types of loans. Whatever loan type you choose, there has seldom been a better time to buy a new home or to refinance your current home.