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Peachtree City Mortgage Loans in 2009

brian_alg — Wed, 01 Apr 2009 00:47:07 +0000

Many people ask us regularly about their ability to obtain mortgage loans on their homes here in Peachtree City in the current recession. We should consider ourselves to be quite fortunate, as the values here have only dropped a small amount. That being said — mortgage financing in Peachtree in today’s market is all about the appraised value of your home.

You should always keep these things in mind as you plan what your home is worth in this market for a refinance or even to sell it. Peachtree City mortgage loans are based on several factors:

income
credit
collateral — this is your house

Most people understand their income and credit, but seem to be less sure about how the values are calculated on an appraisal. In Peachtree City, the appraiser will identify 3-4 comparison homes that have sold recently – ideally in the past 60-90 days. In the current market, the only way lenders can get a true indication of value are recent sales. So….even though your neighbors home in Smokerise sold for $850k 10 mos. ago, your value is going to be based on the most recent sales. If there are good comps to your home more recently…say 2-4 months, your value in terms of the “sales comparison method” will be based on these comps.
This one fact catches many Peachtree City residents offguard when they are running basic analysis on the prospective new mortgage loan. If there is a takeaway – always estimate low. Banks are extremely conservative right now, and you will avoid significant heartache if you don’t set yourself up with an unrealistic value of your home. Remember, an appraisal is only an indication of what the market value of your home is at that point in time. In 6 months, the value may possibly be completely different.

Atlanta Bulk REO Property Purchase

brian_alg — Tue, 31 Mar 2009 06:04:39 +0000

Virtually every day I get calls from customers wanting to buy 10+ properties from a bank or institutional seller. With the lack of credit and capital available, I find this amazing!

The reality is that the deals available today will make people rich – extremely rich. Properties are selling for 25-40% on the dollar……unprecedented discounting.
If you are interested in bulk property purchasing, we can help you do to our direct lender relationships including REO departments.

Making Home Affordable Program Unveiled by Fannie Mae

brian_alg — Mon, 30 Mar 2009 01:19:05 +0000

Here are some details of the very recently announced program by Fannie Mae. This won’t help everyone, but it will free up room in many homeowners monthly budget.

Can closing costs be rolled into the new loan? – Yes, as long as the new first mortgage loan will not exceed 105% of the appraised value.

What about my existing second mortgage? — If there is a second mortgage or Home Equity Line of Credit, it can be subordinated, and remain in place behind the new first mortgage. Big if here. IF the 2nd lender will allow the 2nd mortgage to be subordinated. At the current time, that is unlikely.

What if the combination of the first mortgage, existing second or HELOC, and closing costs [these three together are the Combined Loan-To-Value - “CLTV”] will exceed 105%? – That is OK, there is no cap on the CLTV. Again, it is currently difficult to get your 2nd lender to agree to the subordination.

What about Mortgage Insurance? – If the loan currently has private mortgage insurance (MI), that MI policy will simply carry through the refi, and will stay in place. If there is no MI on the current loan, then MI is not necessary for the new loan, regardless of the new LTV.

What properties are eligible? – Owner-occupied primary homes (detached and condos).

What payment history is required on the existing mortgage? – One 30-day late payment is allowed.

People still call about stated loans!

brian_alg — Sun, 29 Mar 2009 15:49:06 +0000

It’s been over a year since the subprime and Alt-A meltdown that forever changed the mortgage industry. The interesting thing is that we still get calls on a weekly basis asking for “stated loans”, or no documentation loans. The conversation typically goes like this….

Caller: Hi…My name is XXXX and I’m looking for loan to buy a new house (or beach house, mountain house, investment property) this month.

Me: Great! We’d love to help. Tell me more about what you are looking to do. How’s your credit? How much are you putting down?

Caller: My credit is Ok. I think it is the high 600’s. I can put 20% down.

Me: Ok. We’ll get you approved, but the reality is we should look to see how we can raise your credit score a little bit. In many cases, we can pay down a little bit of your revolving debt, and gain 40-50 points on your score.

Caller: That’s great. Let me make a list of what I owe and we can review. Oh…also, I own my own business and need to go “stated”.

Me: Silence……..

Me: Unfortunately the stated, no ratio, and no documentation programs are all gone. As well know, the changes in the mortgage market as a result of the subprime meltdown are dramatic. Even for someone with an 800 credit score, you absolutely must document your income.

Caller: Ok….I file my taxes, but only claim a small amount of money each year.

Me: Let’s see what we can do with your real income, debts, and what you are looking to buy.

It may take another year or two, but eventually the word will get out that stated loans are gone. In my opinion, we will not see this product back on the residential side for many years to come. While stated loans are not the sole reason for the subprime crises, the reality is that stated loans are viewed as a big part of the problem that has devasted our financial markets.

Can I qualify?

brian_alg — Sun, 29 Mar 2009 14:46:54 +0000

The media is full of information about how great the loan rates are and how bad the housing market is. What is not covered as often is the more strenous qualification process that Fannie/Freddie have imposed. Whereas before it was quite easy to be approved for your new loan wtih credit scores down to the low 600’s, this is no longer the case. If your credit score is below 680, you will find it difficult to qualify for the low rates that are advertised.

You greatly improve your chances of qualifying for the best rate on your mortgage with the following credentials:

Low debt to income ratio
Credit score over 720
If a refinance, at least 20% equity in your home and if a purchase a 20% down payment
Job Stability – whether you are an employee or own your own business, the length of time is now an important factor