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HATE THE MORTGAGE PROCESS?

I’ll bet we haven’t lost any readers because it seems like everyone hates the mortgage process. From our perspective it's a bit humbling, especially when talking about our own careers. But after all, who wakes up in the morning and says, “I can’t wait to go find a mortgage today!”

NOBODY DOES!!!

It’s not like going to the big game, or even the mall. It’s more like getting your teeth drilled or something – right?  It’s a necessity that just plain hurts.

Like anything else that you put off, the “cavity” gets larger and more painful if you ignore it. So, if you ignore your credit, you may just lose your dream home -or- your ability to refinance to pull equity for that room addition, college for the kids, debt consolidation, the new swimming pool or whatever…

We see it all the time. People find their dream home first, then think about the financing and can’t get it. Disappointing? YES! Avoidable? YES!

BE PROACTIVE

You’ve got to get educated about the “hated” mortgage! Carve out some time and do it! Maybe, if you find a mortgage pro that will take the time to explain what it takes, you’ll say, “that wasn’t so bad.” Time is key. Learning what it takes to get your home financing, even a year in advance, is smart!

THINGS HAVE CHANGED AND KEEP CHANGING

Mortgage programs are different than even a few short months ago. Don’t assume what worked before will work again. New changes are on the horizon and can impact your ability for home financing. Take action now if home loans are in your future.

KEY FACTORS IF YOU’RE BUYING

Credit scores are still “GOOD, BAD and UGLY” but the number evaluation has changed. 720+ is good credit and should be your credit score goal. 620 is bad, but can offer some options. 580 is ugly and may get you in the house with certain programs.

Liquid assets include money available for a down payment, closing costs and payment reserves. The more you have the better. 100% financing may become difficult, if not impossible to find in the future.

The condition of the subject property is important. Major construction and condition problems mean problems getting your loan approved by the lender. Fixer uppers require special consideration.

WE’RE HERE TO HELP – CHANGES IN THE INDUSTRY

Recent legislation has been signed into law that impacts FHA loan programs. Currently, FHA loans require the borrower to put 3% of their own money into a purchase. Down Payment Assistance (DPA) programs have been in place to allow the seller to fund the buyer’s down payment (the money was allowed toward the 3% requirement). Not any more. Effective 10/1/2008, the DPA option is eliminated and the 3% buyers money requirement is increased to 3.5%. No more 100% FHA loans - a big hit for many home buyers!