Financing a Purchase- Our Local Banks Have Money to Lend!!!
As buyers are well aware, there are an abundance of great deals currently available on the market. but financing has tightened up considerably. Here is the latest from the local lenders:
Financing your purchase- Click here for financing options.
The good news and the bad news. The Good News is that local lenders are still in business and have money to lend. The smaller local banks such as Mother Lode Bank and Umpqua Bank have not indulged in the sub prime lending market and their conservative stance has resulted in a sound balance sheet. Other lenders such as Foothill Home Mortgage and Country Wide ( now post B of A merger) are also keen to lend. For a list of local lenders, call or e-mail me and I'll be happy to send you the latest.
Current Lending Hot Tips: FHA loans are strong at present however you have to have a good credit score of about 700 or more over the past 12 months. That means NO late payments , NO collection letters, or other nasties.
For new FHA loans, remember that as of January 1, 2009 these loans will require 3.5% down instead of the current requirement of 3% .
Pre Qualified vs Pre Approved Pre qualified means you are a qualified candidate for a loan but it is hypothetical. The real deal is getting Pre Approved. Pre Approval means the bank is ready to lend to you today and that carries clout when making an offer. Pre approval letters usually say they are valid for 3-6 months. Don't trust that! Not in this market! Get pre approved again if your pre approval is more than 8 weeks old. In this economic climate, a lot can change in 8 weeks so lenders are really hot on current credit information.
Conventional Loans- Conventional loans are still out there and local banks are interested in funding them. Be aware tho, if you are putting down 20% or less, you will be required to have mortgage insurance and deals are getting blown out when minimum credit scores are below 720. Yup, its the truth.
Short Sales: Click here for more about Short Sales and REO properties
Short sales and REO properties are in abundance and come with their own financing issues. The Short Sale process is lenghty and buyers need to make sure that they are prepaed to stay the course. Layers of burocracy have gummed up the sales process and while sales are completing, often times they take months instead of weeks. Be sure to work with a lender that understands the demands of this type of purchase and with a Real Estate Agent experienced in Short Sales.
Short sale questions for sellers:
Will I get any money from a short sale? No. The lender is going to take a loss on your loan and whatever comes from the sale will be theirs.
Will my Credit Score fall? Yes, but not nearly as much as in a foreclosure.
Can I stay in the house? Yes, but the objective is to sell your house. While this may take several months, you need to make plans to move as soon a possible.
Will this really help me to avoid foreclosure? There are no guarantees but it's worth a try. I will work as hard as I can to put you in the best position possible but the control is with the lender and I can't promise things beyond my control.