If you are going to boogie, learn to dance.
As many of you know, the Mortgage Market is changing faster than Tom Welling's Superman character into his "get-up" in the television show, Smallville. It's truly a jungle out there and you'll need a Machete, Cargo Field Pants, and the proper Guide to navigate you through the ever growing foliage. As a guide in the jungle that is the Mortgage Industry, I wanted to give some simple bits of information to arm you on your journey.
In no particular order, please take note of the following as they may be pertinent along your travels:
- As of April 1st, 2009, FHA will reduce the LTV's (loan amount compared to the value of your home) on cash-out transactions. It currently is 95% but that will be cut back to 85% real soon. To ensure you can get in before the guideline changes, an appraisal case number must be assigned to your home before said date.
- 100% Financing is still available! Yet, the only two products currently sporting this popular product are VA & USDA Loans. For more information and shameless self-promotion on the latter, click here. Might I add that if you are going to utilize 100% Financing, try to ensure you have money in the bank after the fact. Being a homeowner bears certain responsibilities. God forbid something goes wrong and you don't have Lenny The Landlord to fix the issue. You don't when you own a home. The responsibility falls on you.
- Know your Credit Score. I can't stress how important that is these days. I got word from one investor today who has changed their minimum credit score on ALL Mortgage Products to 660. Most are at 620. A few still may go below that but proceed with caution. Know the rules and learn to use them to your advantage. For more extensive insight on Credit, grab that mouse and left click right here.
- Pay close attention to what homes like yours are selling for (not just being listed for) in your area. That's a good indicator of what your home is currently worth in this market.
- While the media may give you the heads up in the drop in interest rates, contact your Mortgage Professional to get the real scoop. Taking the anchor of CNN's advice on where Mortgage Rates are at are akin to asking me what the weather will be like tomorrow. By the way, you can expect a balmy day with hints of fog glazing the ides of morning... turning into a slightly breezy, overcast, but generally nice day. High will be 99 Degrees. Low will be -20. But don't quote me on that.
- If you are considering buying a home in the least bit, be aware of the First-Time Homebuyer Tax Credit. It could prove to be another incentive (in addition to low interest rates and a large amount of inventory) to take that next step in owning your own home. It isn't a reason in of itself, yet it is icing on what could be a very delicious piece of cake.
I will be writing about five more useful tips very soon. I wanted to keep this short and sweet, like Ryan Seacrest:) Besides, you only have so much time on your hands while you sift your way through this jungle.
And if you aren't already a homeowner, you may want to take that leap. If you have the right Guide, you aren't just drawing on faith when you are in mid-air.
About The Author: Jason Sardi has been on the lending side of the Real Estate Business for over eight years. His passion for helping people and general disdain for con-artist blowhards has kept him trying to do right by as many people as possible along the merry way. You can reach this happy chap by email @ jsardi@ihmci.com or by phone @ 610-439-2166 ext. 229. He's a survivor in that jungle out there and has the scars to prove it:)
Hi Jason, Excellent post and well written. I got my cargo pants on and jungle boots ready to lace up just in case I need to be the tour guide. My most recent 2 buyers tell me cash is the way to go these days. ( I keep trying to get them pre-approved- just in cash the cash doesn't work anymore, lol. ). If I had that much cash I would be buying a home in Belize, LOL.
William - Thanks. If I had that much cash, I'd buy an abode in Belize as well. We could be neighbors:)
Jason - Saw this on twitter and came right over. This is great information but quick action is needed in some cases. It is also important that both buyers or sellers seek the advise of a Realtor and Mortgage professional, I think their help is needed to navigate these waters.
Sardi,
Can I add one more buddy- if you are a first time buyer you can get up to $8000 within weeks of buying your home!
Great post. You know where you will be seeing it come Monday...
Gerry Suarez, Jr.
Your FHA Loan Pro!
Jennifer - True that. Seeking the advice of Realtors will most definitely be in my next installment. Thanks!
Gerry - Add as you will, my man. Your input is appreciated and damn important. If I see this as flagged for copyright infringement, I'll know who done the deed;)
Jason,
Very good points!
If I were to add to it I'd suggest the you expand on the "First Time Home Buyer" programs. Consumers may think that lenders speak English! You can have owned many homes and still be a "First Time Home Buyer"according to many of these programs! Most of these programs really mean that you haven't owned a home in the last three years!
Tax credits aren't the only incentives/assistance available! Many areas have "first time" home buyers assistance also. These vary from a few dollars to significant thousands! Often selected professions get the money regardless of how long they've owned homes.
Bill
Bill - Also good points. I'm currently working with a buyer in Philadelphia that should close within the next two weeks that is taking advantage of a grant program offered by the City of Brotherly Love & matched by his employer!
Jason - You got 5 great tips here ! The market certainly is crazy and volatile. If I was a first time homebuyer, I would be buying a house right now ! They can even get that tax credit on 2008 tax return and do not even have to wait until next year. And with rates this low, wow ! Hope all is well. ~ Chris
J-Sard ! - Terrific Tips ! Easy to digest, and I'm sure useful for the consumer.
It's amazing how important your credit score is right now - I hear almost weekly that the minimums are being changed (increased) to qualify for programs.
... tricky times indeed, but all the more reason to align yourself with a Mortgage Banker who knows his onions !!!!
Cheers Mate ! Great Post !
Sheldon
PS: Tues or Weds will be here soon
Chris - And if you were qualified, I'd push like there was no tomorrow. Exciting time to buy, if you are qualified to do so. I wish a few things on any stimulus passed along this way, open up credit to seasoned Real Estate Investors. We shouldn't make it so hard, especially now. On a sidenote, MI Companies can suck something I stuff between my legs while re-enacting "Silence of the Lambs" for public approval.
Sheldon - I know onions; they are to be peeled back. Tues or Weds more than likely works:)
Hi Jason - Some vry good information and sound advice. I escpecially appreciate your suggestion of knowing what homes are selling for vs. what they were listed for. I can't tell you how often I talk with homeowners who focus on the list price...not what homes in their area actually sold for. It sure makes my job easier when home sellers have a realistic picture rather than a escalated idea of home prices in their area.
Have a super weekend!
Jason - These are great tips and important for both buyers and sellers. With the rapid changes taking place in the mortgage industry on what sometimes seems like a day to day basis, it's nice to have someone you can count on with the most up to date information and knowledge.
Jason -- nice tips -- planning to hand out to a couple of buyers this weekend! Haven't heard -- did she hit the road today?? soon as the phone charges I'll text her!
Jason:
Rather than say great information and a well written post....I'll just say "Ditto, Ditto.....to all the comments. :)
Jason this is excellent information you are getting out into the public's hands. Better to know well in advance of the changes coming down the road.
Jason, minimum credit scores of 660 are going to lock a lot of people out of financing and pretty much nothing happening for anyone. We need more programs THAT WORK for sure. Thanks for the update and review.
Marlene- I agree. There can be a large discrepancy between what a home is listed for and what it actually sells for. It can mean all the difference in the world in what one's home is really worth.
Donna - That's a fact. I have a feeling that when stability comes back, I'll get real bored;)
Alexsandra - Yes, Jennifer hit the road yesterday. She's a driving machine I tell you!
Ron - Grazie, my friend.
Bill - Knowledge is power and part of what I love about this forum. Thanks for stopping by.
Gary - I won't suggest that will be the minimum score for all investors and it currently is not. But, the possibility does loom out there.
Normally I would pass up your mortgage posts to find the interesting ones but I honestly found this one interesting and very timely. Hmmm, I don't know if this is a good thing or not:)
Nice post Jason, as usual. Great consumer info for sure. I reblogged it.
Jason... some good detailed information. Consumers need to know about the fico changes, because so many loan officers are using this as an excuse not to do loans at the last minute. Meaning, they make the promises now, saying that they can do the loan, but then when all else fails, they blame the credit score. It's sad and scary.. Again, some good info.
Diane - It's probably a bad thing but I won't stop posting more of the interesting ones. In fact, when I'm a tad bit more in check with myself (coming soon)... politics, philosophy, psychology, and who killed Kenny is right around the corner.
Erica - Thanks. With Jennifer getting here in about three days at this point, I hope to finally meet you and pour you a glass of wine... or at least cheerlead at a local rant;)
I like the tip to look at what homes are selling for, not just what they are listing for. Many people get confused on that one.
Jeff- Maybe I don't see that as much as you. I've gotten loans that fell thru because of a lack of product knowledge or when to just say, "I can't do the loan but here's what you need to do to put yourself in a position to own a home" but not much fall out on credit scores. It used to be that the majority of my biz was from conforming folks so credit scores, at that time, weren't as much of an issue. They were 680 and above. Then again, these days, you get your hand slapped even if you have a good/great credit history and less than ideal (740~cough~) score on the conforming end. I think you know what I want to do with the tail that is wagging the dog... makes me want to turn on a dream.
JL - Very true. Knowledge will cure this deal; it's about damn time we starting dispensing it unabashed.
Hey Jason: Great Information - We need to continually update the consumer and Realtors on the ever changingclimate. It is so great that I re-blogged your post. Hopeyou don't mind! If you do USDA Rural loans, they just announced the restructuring of their income tiers. This will open the door for more to qualify. Love the comment to JL!
I was so mesmerized by the writing I had to go back and reread the tips :) When I grow up, I want to write just like you!
Hi Alex! I'm home :))
btw... how is this post NOT featured??
Hey jason great post thanks for the information
great stuff!
Jason, good stuff. Thanks for the post.