March 7th, 2010
I always felt like an “Interest Only” loan (where you pay no principal and are only making the interest payments on the loan) was like taking your house and putting it on a credit card. I was never a big fan of these loans, and as a result never did many because clients always sensed my unease, and ended up going to the competition who talked these loans up as a great way to “get in the market.”
I thought the Interest Only loan has been put to bed, and no one was doing them anymore. I did not think any client wanted them, nor did I think many banks offered them. But, I was surprised when an old client of mine said he was approached by a lender to refinance from his fixed rate mortgage to an Interest Only loan. Huh? Read the rest of this entry »
Tags: Refinance To An Interest Only Loan?
Posted in Refinance | No Comments »
March 4th, 2010
I saw a house recently that was priced at $659,000. This house had been on the market for 60 days, with no offers, at $659,000. I noticed that they did a price reduction of $10,000 to $649,000 after they were on the market for 60 days. And this begs the question, “is a ‘1.5% OFF SALE’ going to draw buyers into the store?”
I believe a $10,000 price reduction is a slap in the face to the marketplace, to potential buyers, and to logic. If the house was not worth $659,000, guess what, it ain’t worth $649,000! Read the rest of this entry »
Tags: house prices 2
Posted in housing values | No Comments »
March 1st, 2010
I have heard more and more clients tell me that some nameless, faceless mortgage people or “friends” have told them they should refinance from a Conventional loan to an FHA loan. Huh? Usually the smart advice giver is giving the advice because they know the client has had a hard time getting a sufficient appraisal to refinance as a Conventional loan, and that FHA requires much less equity.
Wow, I am surprised that such incredibly expensive advice is still being passed out.
Here is why I find that advice silly, Read the rest of this entry »
Tags: FHA refi
Posted in Loan Types | No Comments »
February 24th, 2010
Title insurance is insurance against defects in title to real property. It is meant to protect an owner’s or lender’s financial interest in property against loss due to title defects, liens or other matter of public record. It will defend against a lawsuit attacking the title, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.
Just as lenders require fire insurance and other types of insurance coverage to protect their investment, nearly all Read the rest of this entry »
Tags: title insurance
Posted in Underwriting Rules | No Comments »
February 17th, 2010
Buying distressed properties, whether they are in foreclosure or are a short sale, can be difficult. I am going to cut and paste an email from a prior client in relation to this topic, and my reply, as an example of how difficult it can be to buy distressed properties: Read the rest of this entry »
Tags: buying distressed properties
Posted in housing values | No Comments »
February 12th, 2010
I almost feel like there is no more PMI (Private Mortgage Insurance) on condos! But that is not true, there is PMI availability for condos, but it is getting harder to get. Most people know by now that PMI is needed on a Conventional loan if you have less than 20% down payment. I recently had a client who Read the rest of this entry »
Tags: PMI
Posted in Underwriting Rules | No Comments »
February 8th, 2010
It seems any banks that are still doing home equity lines of credit (also known as a HELOC) have limited them to an 80% combined loan-to-value (LTV). This means that the existing 1st trust mortgage and any equity line cannot exceed 80% of the current appraised value. For example: Read the rest of this entry »
Tags: home equity line
Posted in Uncategorized, Underwriting Rules | 5 Comments »
February 2nd, 2010
It used to be simple to get an FHA condo loan. Lenders could do an FHA “Spot Condo Approval”, which meant that the condo did not need to be on the FHA Approved Condo List, and all we lenders needed to do was verify that the condo met certain FHA requirements (51% owner occupancy, no litigation against the condo, no more than 10% of the unit owners behind in their condo fees, etc). Now the condo approval process is more centralized, and more complicated. Read the rest of this entry »
Tags: FHA condo rules
Posted in Underwriting Rules | No Comments »
January 29th, 2010
Getting a condo loan approved seems to get harder and harder each day. Below are the loan approval conditions I got on a recent loan submission for a condo purchase:
1. Buyer to get 20% HO6 dwelling coverage.
2. Statement from the property management company about the cleaning services in the condo’s budget. What type of cleaning services are they?
3. Statement from the appraiser on whether having no parking in the project has an effect on the value. Read the rest of this entry »
Tags: condo financing problems
Posted in Underwriting Rules | No Comments »
January 26th, 2010
Has anyone else noticed that buying new investment real estate does not cash flow? At today’s prices, which are likely lower than in the last several years, you still seem unable to find real estate that can turn a profit as a rental property. I wonder why that is? Read the rest of this entry »
Tags: investment property
Posted in housing values | No Comments »
