People seem to get confused by maximum loan amount allowances, down payment requirements, and the interest rates surrounding them. I thought it would be helpful to have a breakdown. I am going to show loan limits for owner occupied loans, for Conventional, FHA and VA loans: Read the rest of this entry »
I wrote a blog here in the summer of 2010 that talked about getting an FHA loan on a property that has been flipped. A flipped property is one that an investor buys and fixes up with the purpose of immediate resale. The Federal Housing Administration (FHA) has had a 90 day flip rule in place for quite a while to prevent the purchase and quick resale of a home within 90 days. They have doubts about the value added by investors over such a short period of time, Read the rest of this entry »
I always hear how people miss the good old days. I am not sure I do. I prefer progress. But lately, the mortgage industry has been regressing, and I would say that we have not been making progress; we have actually been going backwards. It seems the mortgage process has swung from too easy, to too strict, and now to downright ludicrous. There is nothing that Fannie Mae wants undocumented that is related to a mortgage borrower's finances, and I mean that literally. So I understand when someone says to me the following, Read the rest of this entry »
I have cited a thorough and expensive research study several times recently in other blog posts. One message I have not relayed that comes from the data in that study is how poorly the big banks are at execution when it comes to doing mortgages in a timely and efficient manner. I will cut and past comments directly from the study that quotes numerous Realtors, and I will let their comments speak for themselves. Consumers deal with mortgage transactions once every 3-7 years, but Realtors deal with loans every day, and their opinion is the most valid, unbiased and relevant. I have heard a lot of reasons as to why a homebuyer thinks its best to get a mortgage from a big bank, all of them are wrong headed. I hear Read the rest of this entry »
It has been a while since I wrote about pre-approvals. It seems I need to write about this more often. Lenders hand out pre-approvals like candy, with little analysis, little required documentation, and then homebuyers go out into the marketplace making representations they cannot meet. And then they lose money. How? Read on. Read the rest of this entry »
I am from the government and I am here to help you. That punch line seems to be coming more and more true these days. Fannie Mae and Freddie Mac were taken over by the federal government in bankruptcy receivership in 2008. Fannie Mae and Freddie Mac, along with FHA and VA make up almost 100% of mortgage lending in our country. I would not say that the mortgage industry has been socialized, but it certainly is dominated by government. In the last four years the big government stamp on the mortgage process is undeniable and is the sole reason people scream bloody murder at their mortgage lenders during the process. Below are some exact reasons you can thank the Feds for your mortgage nightmares: Read the rest of this entry »
Do not shoot the messenger. It is a fun cliche, is it not? However, it is more than a cliche, it is truth. Why do so many of us act like three year old children when given news we do not like? The mortgage industry is currently full of messengers and full of hard news to deliver. The news is usually fairly innocuous, but people do not take it that way. Below are some examples where the response I hear from people leaves me puzzled. Read the rest of this entry »
In some real estate markets, the close-in DC Metro area being one of them, the market is strong enough that sellers will not accept an offer contingent on the sale of the potential buyers current home. Sellers figure in a strong market, why should they accept an offer based on a buyer that has a house to sell, and who knows if the buyers are realistic, will price it to sell, and will do all the right things to market and sell it quickly. So sellers wait to get a non-contingent offer, because they know one will come along soon enough.
As a result, I get some buyers who ask me to get them qualified to buy a new home, without the new loan being contingent on the sale of the current home they own. Read the rest of this entry »
Santa versus The Grinch represents so many different scenarios in life, good versus evil, positive versus negative, tortoise versus the hare…..an on time mortgage transaction versus a delayed one. Huh? Wait. What does Santa and The Grinch have to do with the mortgage process? Read the rest of this entry »
There was some confusion as to how long the latest FHA loan limit increase is going to last, which I blogged about here. Was it through the end of 2011, or 2 full years through 2013, or just through next year and it ends 2012? So the verdict is in, and the latest FHA loan limit increase expires at the end of 2012. So come December 2012, there will be another political fight, Read the rest of this entry »