With the meltdown of the sub-prime market last year there is NOTHING that has changed more completely than the financing element of sale transactions. Years ago you had the choice of fixed rate financing or an ARM...the standard Adjustable Rate Mortgage. Your qualified for both based on your income, employment history, debt levels, credit history and your assets. Recent years saw those loans fall from favor and the wacky option ARM's and stated income hybrids became the favorite of every lender in town as they stuffed clients into loans that were pure financial suicide.
THINGS HAVE CHANGED! There are far fewer financing options open to buyers today than even a year ago. The FHA low down payment loans are back in a big way. Stated income loans, liars loans, are gone gone gone. Fully underwritten loans are the NORM now and you should expect that EVERY scrap of paper you provide WILL be scrutinized and authenticated. If you are not one who saves bank statements...start now! To get a loan today you'll need to prove employment, source of funds, and have decent credit. Appraisers have been drawn to heel by ALL lenders and are being as conservative now as they were ridiculous a couple of years ago. In fact, the new rules for appraisals prohibits the agents from trying to influence the appraisers. This sounds good in theory but the reality is that the new rules have had a negative effect on sales as the appraisers are being pushed to deliver their product for less money than ever before.
Loans for investors are almost impossible to come by...and even persons with giant piles of assets and sky-high FICO scores are being put through the wringer as they apply for even modest financing. If you think you can get a loan with a high FICO score and your signature these days YOU ARE WRONG!
Financing is the biggest issue in every sale today. Expect to have some financing related hiccups in EVERY deal. If you are a seller it is crucial to make the qualifications of the buyer the topic of inquiry BEFORE entering an escrow.
If you have questions regarding financing give me a call. I have EXCELLENT resources in the lending community. They will counsel you according to your needs and see to it that you get the loan that best fits your needs.
With the massive wave of defaults that is driving the resale market the lenders have gotten to be a real pain in the neck. They are demanding more and more supporting documentation from even VERY qualified buyers as they overreact to their own prior sins which saw them lending money to anyone with a pulse. The reverse is true now so the best advice I can give you is to GET STARTED NOW ON THE LOAN...
nothing solves problems in this world like a pile of money... and that's any seller wants one from you! Contact your lender and have them take A FULL BLOWN WRITTEN MORTGAGE APPLICATION and COMPLETELY PROCESS it to get you a FULLY DOCUMENTED APPROVAL...having your loan approved makes you the equivalent of a cash buyer and makes you look super in the eyes of any seller...financing is a key factor in negotiations...get this taken care of and the rest of your purchase will go much more smoothly. A pre-approved loan is MANDATORY. Any agent who doesn't impress this upon you is doing you a huge disservice.
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