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photo credit: amishsteve

There’s no simple answer to how the housing market got into this mess but the bottom line on the credit crunch is you do NOT have to have 720 fico with 20% down to get a loan.

What are Investors (Mortgage Lenders) looking for these days- credit, income and equity. These criteria still hold true, guidelines have tightened up but these are the main areas of concern for all investors.

Credit- what is your credit score? Scores range from 500-800. A credit score of 720 or higher is ideal. Anything over 680 is great. 680-650 is ok. 650 and below would be a perfect fit for FHA. Please look to future posts on the reason why all radio adds you hear now-a-days are all about” the new and improved FHA loans”…

Income- are you self employed (1099) or W2? If you are a self employed borrower all investors are looking for a two year history in the same line of work. If you are a W2 employee you will need a two year history of employment regardless of industry. By the way- Job gaps are acceptable for W2 employees and it is ok to be fresh out of school looking for a job with no history of previous employment.

Equity- are you looking for 100% financing or 80% financing, etc…

Investors determine their products and pricing based upon their layer of risk they are exposed to in the above three areas. There is one remaining category of importance to investors- occupancy. Will the property to be an investment property or do you intend to occupy the property as your primary residence?

We have seen the credit crunch eliminate more aggressive products such as 95% + non owner occupied financing, 103% financing, etc… don’t be fooled by all the press surrounding the mortgage industry. There are still many loans out there for both owner occupied and non owner occupied properties.

Best of luck during your home search, and feel free to contact the Get Home Denver Team with any questions!

photo credit: EverySpoon

Here are current mortgage rates for the Denver Metropolitan area. These rates change constantly, so they are subject to change. I will post new rate information if these figures increase, or decrease dramatically.

Conventional 30 year fixed: 5.875%

FHA 30 year fixed: 5.75%

VA 30 year fixed: 5.75%

5 year interest only ARM: 5.375%

Jumbo 30 year fixed:  7.875%

Jumbo 5/1 ARM 5.5%

Rates for Government programs (FHA & VA) have improved slightly over last week.  Conventional and Jumbo products have remained about the same.  There are fears from inflation that may move rates higher (Oil at record highs!)

If you have any questions about mortgages, or how to lock in a rate, please contact us at any time.

Here are current mortgage rates for the Denver Metropolitan area. These rates change constantly, so they are subject to change. I will post new rate information if these figures increase, or decrease dramatically.

Conventional 30 year fixed: 5.875%

FHA 30 year fixed: 5.875%

VA 30 year fixed: 5.875%

5 year interest only ARM: 5.375%

Jumbo 5/1 ARM 5.5%

You’ll notice the market is not wanting to play on adjustable rate mortgages, and they are making sure to get a premium for the Jumbo loan programs. But the market is loosening up a bit for this type of money.

If you have any questions about mortgages, or how to lock in a rate, please contact us at any time.
photo credit: woodleywonderworks

The rate of foreclosures seems to be linked to a little bit of Mortgage Fraud. Well, I’ll be darned. Who’d of thunk it?

Colorado has ranked in the Top 10 (or bottom 10, depending on your level of cynacism) for foreclosures during many of the past 5 years. Not coincidentally, the Centennial State has been in the Top 10 for Mortgage Fraud, over much of the same time.

Why is this? Maybe Colorado is full of dishonest people, home of the swindler? No, the real truth lies in the fact that Colorado was only one of two states (Alaska being the other) that had ZERO regulation over the mortgage industry.

Recently, this has changed. Mortgage Broker’s now need to be licensed by the state, and there are several new laws, enacted by the Legislature, targeting mortgage fraud and deceptive lending practices. By January of 2009, all mortgage brokers are required to complete educational requirements and pass a state exam, to continue in the business.

A good start, and with the tightening of underwriting guidelines, the “Wild West” that was, will be a bit more tame!

We are happy to refer you to LICENSED mortgage broker’s with whom we are comfortable putting our reputation behind. Please let us know if you would like the names of a couple honest and ethical mortgage professionals!
photo credit: adactio

This past month two of our clients received “Gift Funds” from Mom and Dad to help them with the down payment on their new home. There are lending guidelines for “Gift Funds” and it’s important to understand how they work in the event you are the giftor or the giftee.

Here’s what you need to know:

On a conventional loan up to $417,000 (Fannie, Freddie product), if the Gift Funds from mom and dad are less than 20% of the purchase price the borrower (son or daughter) must have 5% of their own funds. As an example: $250,000 Purchase price of the home$ 25,000 10% - gift from mom and dad$ 12,500 5% - required borrower contribution from their own funds

In this example, if the Gift Funds were $50,000 (20% of purchase price) then the borrower would not be required to contribute any of their own funds.

FHA loans do not have a minimum contribution requirement amount from the borrower regardless of the gift amount.

The reason I bring this to your attention is often times mom and dad will liquidate investments thinking their generous gift of 10-15% of the sales price will be plenty of money to help their son or daughter buy a home. Then they find out about the 5% funds rule which their children don’t have, then they get upset because they liquidated funds, possibly paid capital gains and the home purchase doesn’t happen.

There’s also some paperwork to be completed. Mom and/or Dad will be required to sign a one page Gift Letter which states your relationship, the amount of the gift and from what account the funds will come from. We will also ask them for the most recent statement for the the account in which the gift funds will come from. All standard procedure, and necessary to comply with underwriting guidelines.

Regulators are coming up with a proposal that will change some rules regarding appraisals as part of a settlement agreement between the Attorney General of New York, Fannie Mae, and the Office of Federal Housing Enterprise Oversight (OFHEO).  Although these “rules” will not become Federal Law, or Regulation, they will basically have the same effect.

Some highlights of issues that will negatively impact consumers are:

• Real Estate Brokers and Lenders will not be able to give an appraiser any old appraisals, helpful data, or any other estimate of what a home might be worth.
• Real Estate Brokers and Lenders will not be able to have any communication with the appraiser during the appraisal process.
• Consumers would not be allowed to request a new appraisal from the lender if they disagree with the appraiser’s opinion.

These are all ridiculous in my opinion! First of all appraisers are not infallible.  In fact, many times they miss great comparables and the ability to provide this “missed” data is crucial to the accurate appraisal process!  Second, and most importantly, a consumer can not question the authority of some appraiser?  This is total garbage!   There must be some kind of check and balance to prevent an incompetent appraiser from wreaking havoc upon a defenseless seller.  Can you smell lawsuit?

Who will the appraiser be accountable to?  If the mortgage broker, real estate broker, and seller can not speak to the appraiser there is going to be trouble in River City, with a capital T!

This is a complete over-reaction to the FRAUD of a few corrupt mortgage broker’s, real estate agents, and APPRAISERS! Yes, the appraiser was as much to blame on any of these transactions, if not more, than anyone else.  The appraiser’s excuse seems to be that they were pressured by the big bad real estate brokers and lenders. Bull!   So, rather than hold some bad appraisers accountable for their valuations, we want to tell everyone to just leave them alone and trust they are competent professionals.  I think it’s already been proven that some, in fact, are not!  If a qualified, professional appraiser believes one thing, it doesn’t matter how much pressure I’ve ever tried to exude, the valuation stayed the same. (In an effort for full disclosure, whenever an appraisal comes in low, and it affects a seller client of mine, I will go to the mat trying to persuade an appraiser to see our side of the story, and raise the valuation.)

It smells bad to me.  What do you think?

Here are current mortgage rates for the Denver Metropolitan area. These rates change constantly, so they are subject to change.  I will post new rate information if these figures increase, or decrease dramatically.

Conventional 30 year fixed: 5.75%

FHA 30 year fixed: 5.75%

VA 30 year fixed: 5.75%

5 year interest only arm: 5.75%

Jumbo 30 year fixed: 7.875%

You’ll notice the market is not wanting to play on adjustable rate mortgages, and they are making sure to get a premium for the Jumbo loan programs.

If you have any questions about mortgages, or how to lock in a rate, please contact us at any time.

Yearly reviews are a great way to keep on track with your financial goals. You’re probably already meeting with your financial advisor and other asset manager for quarterly or annual reviews, and you should do the same with your Mortgage Planner as well. An annual mortgage check-up is an ideal way to make sure your mortgage is still having the maximum positive impact on your overall financial plan.

A lot can happen in one year. The market can take turns that can open up new opportunities, such as reduced interest rates, new loan products or changes in home values. Furthermore, your personal and financial situation could be mildly to radically different than it was just 12 months prior. Perhaps one or more of the income earners got a raise or lost a job. Maybe you received an inheritance. Even a (more…)

Rates have faired well this week amidst a fairly stable performance by the stock market. Mortgage Backed Securities have been trading inversely to the stock market’s performance.

Currently the rates are as follows:

Conventional 30 year fixed, 5.625%

FHA 30 year fixed, 5.50%

5/1 Interest only ARM, 5.50%

Jumbo 30 year fixed, 7.75%

Contact us for current rate information or to be connected with a Trusted Mortgage Professional!

CBS reported today that the real estate market may be improving.  Check out this video!

As they mention in the video, Real Estate is a Local commodity and you need to have a LOCAL professional on your side.  For any information on Denver Real Estate, contact us!