Happy New Year!

We have made it through another year. 2010 was a challenging year in the mortgage business as well as the real estate business. Those of us who have survived the hard times will be rewarded in 2011. That is what the experts are saying anyway. I believe it to be true. People who were in the game for a quick buck are gone. Mortgage rates are hovering around 5.00% which is still a fabulous rate along with home prices in the area remaining in an affordable range.

Personal Property

I want the drapes, the John Deere tractor, flat screen in the bonus room and all the porch furniture.

Until recently lenders overlooked the personal property included in real estate contracts. Then it was OK to put "at no value" at the end of the big long list of items. Now lenders have decided that you cannot have anything included in the contract other than what is "reasonable and customary" to the market. Well what is reasonable and customary here in the Triangle. Not much! The built in appliances including the refrigerator, blinds and that is about it. As a Realtor you are asked to get involved in every part of a real estate transaction but this has become one part to stay out of. The suggestion is to give the buyer a pen and paper and have them go through the house and write down what they would like, then work it out with the seller. 
Banks what to lend money on REAL ESTATE not on furniture and tractors that can be removed and sold and we have all seen foreclosures missing more than the refrigerator.

Are Rates going lower?

No one has a crystal ball to predict what will happen with the US Treasury Market, Stock Market, or World Events. All of which can effect mortgage rates. One thing we do know for sure, rates are the lowest they have been in 40 years. If you qualify for a loan right now this is the time to get one. Underwriting guidelines are very strict but there is mortgage money available. This is a buyers market and it won't always be that way.

Declining Income

I am sure you know what declining income is but what about in relation to getting a mortgage loan?
It is understandable that someone who is self employed or commissioned has had a rough couple of years. It might be that someone had more expenses either unreimbursed  business expenses or self employment expenses which has caused income to be less year over year. Well from an underwriting standpoint declining income is a problem. Unfortunately underwriters always use a worst case scenario when looking at income. They cannot predict that the income will not continue at the current lower rate and in some cases have a hard time believing that income is to continue at all. The guidelines say to use the lower declining income and to determine the likely hood of continuance of income for 3 years.
You ask who can predict the future? The only way an underwriter can feel comfortable in making a decision is with enough documentation in the file to defend the decision. You may not know this but 100% of loans underwritten today are reviewed again after closing by another person deciding whether the underwriter made the right call. So when we ask for volumes of information on a borrower it is not for some personal enjoyment it is to satisfy many many people who will pick up and review the loan file for months into the future.

Pre Approval the only way to go.

The only way to put an offer in on a home today is with a full pre approval by a seasoned mortgage banker.
I have all of the tools and products of all the major banks and mortgage companies operating today as well as the backing of Towne Bank.
Click on the link below to be connected with my secure pre approval site. I will be emailed immediately and get back to you quickly. I work nights and weekends for your convenience also.

Get Pre Approved Now

Time to get Pre Approved ..... Again

Well just when we thought things couldn't get tighter in the mortgage market, they did it again.

Even though FHA does not technically have a minimum credit score most banks do. Until recently the minimum score has been 620 middle credit score. As of this week most all banks have gone to a 640 minimum credit score. This means clients who were pre approved a couple of months ago need to be brought in for another look.

There are more tools in place now to rescore a borrower when there is incorrect information on a report or something has been recently paid off.

I guess one of the positives out of this is you have a reason to call your clients and get them working on their home search.