New Home Appraisal Nightmares For Homebuyers
I just read this very interesting article about how the new rules regarding home appraisals are having some unintended negative consequences. I know this to be true because I just went through a similar situation with one of my clients. The appraisal for the home she was buying came in much lower than expected and much lower than the home was actually worth. The result was, the deal was dead.
Read this article to learn more.
When It Comes To Getting A Mortgage, Patience Is A Virtue
If you are in the process of buying a home or refinancing your current mortgage, you may need to exercise a great deal of patience. Mortgage lenders have now become the gold standard in caution. Where once they would approve a monkey with a social security number, now you will have an easier time getting top secret clearance from the federal government. And why shouldn’t they? After all, it’s our money they are lending us, right? I am not saying that banks shouldn’t be careful and take necessary precautions before issuing mortgages. However, they have gone completely overboard in the opposite direction.When I first got into the mortgage business, long before there was any such thing as automated underwriting, there was a a standard that every one lived by. Banks, brokers and lenders would look at a mortgage application and ask: does it make sense? And if the answer was yes, then generally, the loan would be approved. If it did not, then it would be denied. Then came the housing boom. And when the question “Does it make Sense?” was asked, everyone said “Who Cares?” Now we have flopped over to the extreme opposite and when the question is asked “Does it make Sense?” The answer is “Even if it does, you probably won’t get approved anyway.” These are our banks, people. The ones we spent a trillion dollars bailing out which is why it stings a bit more.
If you need a mortgage, start early to avoid any disappointment.
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Mortgage Lenders Are Crazy!!!
This is a simple word of caution to anyone seeking a home loan out there. If you think that banks and mortgage lenders are rational business people, think again. Just as they were insane before the housing crash by lending to anyone with a heartbeat and probably some without heartbeats, the are equally insane now with their over cautious lending practices.
I have client who was supposed to close on their loan on June 30th and they are still waiting. The reason? The home they are buying is owned by a trust. I don’t want to get into what a trust is except to say that people set up trusts so that when someone dies they can avoid probate and the trust can sell or transfer the property to whomever.
It is not very complicated, the transaction is the same as any other. Except the lender is making it soooo difficult, requesting one stupid document after another, none of which really have anything to do with trust. The latest request is that the bank would now like a copy of the the sellers death certificate. First of all — the seller is the trust (They Know that), secondly, do they not believe that the person actually died????? Can you tell that I am a little P O’d?
I guess, my advice to you is that if you are in the process of buying a home, make sure all your ducks are in a row and your loan is cleared to close well ahead of the closing date. In this day and age you never know what kind of crazy conditions the lender will require before they actually lend you the money.
Avoid and complications and Get Your Approval Completed Quickly At Lending Tree
Are Housing Prices Finally Stabilizing?
Bloomberg is reporting this morning that einmonth. They take this as a sign the the economy is beginning to level off. But consumer confidence has sunk a bit and the most experts agree that we will have what is known as a jobless recovery as far as the recession is concerned.
For more info, you can read the full story here.
Five Tips For First Time Home Buyers
The bad news is that the housing market is in terrible shape. Prices have fallen, there is too much inventory on the market, and many, many people owe more on their home than what it is worth. This has caused much pain for many homeowners, builders, Realtors and mortgage professionals. Like I said, that is the bad news.
The Good news is that if you are a first time home buyer in the market, this is probably the best time to buy a home in recent memory. With prices low and mortgage rates lower, you can get yourself a real bargain. Not only that, but the government is also give an $8,000 tax credit this year to people who purchase a home. What more can you want.
We all know that all good things come to an end, so if you are really considering buying your first home, I wouldn’t wait too long. It won’t be long now before prices actually start climbing again, interest rates rise and the government ends it’s generous tax incentive.
So what should you do if you are considering such a move? There are certain steps that I would take to get the ball rolling. And in no particular order, here they are.
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Make Sure Your Credit Report Is In Good Shape.
You need to know exactly what your credit score is, and if it is low, you need to work on raising it up. There are several places online where you can get your credit report for free instantly. Look at your report, make note of any inaccuracies and have them repaired. If your score is low (Below 620) find a professional who can help you raise it so that you can be approved for a mortgage loan.
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Get Rid Of As Much Monthly Debt As Possible.
Start paying off your smaller bills if you can. You want your monthly debt to be as low as possible so that you can get approved for a mortgage. Now days, the banks are not comfortable unless your total debt to income ratio is under 40%. By eliminating as much debt as possible, you can more easily avoid that threshold.
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Start Saving.
Although there are many government and FHA lending programs that allow you to buy your home with as little as 3% down or less, you will still need money for the transaction. Inspections, appraisals and other settlement costs tend to add up quickly and you will have to pay for theses things out of pocket before the closing, so be prepared.
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Get Pre- Approved Before You Start Shopping.
There is nothing worse than the heartbreak of finding your dream home only to discover that you will not qualify for a mortgage. The best way to go about the process is to get pre-approved so you know exactly how much you can afford ahead of time. A pre-approval will also give you a pretty good ideal of what kind of money you will need to have in your pocket. Once you have all this information, you can go out and shop confidently and avoid any unpleasant surprises. The easiest and best place to get pre- approved is at LendingTree Mortgage Loans
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Spend Only What You Can Comfortably Afford.
You may find that a bank or mortgage company is willing to lend you more that you originally thought. Avoid the temptation of maxing out your mortgage. Stay within the budget that you originally planned. Your monthly payments should be at a level that you can easily afford without stress and anxiety. So even if a bank wants to approve you for more, say thanks, but no thanks.
