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Guess What? THE LENDING ENVIRONMENT HAS CHANGED!!!

GUESS WHAT?  THE LENDING ENVIRONMENT HAS CHANGED!

I recieved a referral from a realtor for a client interested in buying a $60,000 condominium in Towson, MD.  We'll call him FRED.  She asked if I thought it would be a waste of my time to call Fred.  I said no and contacted him immediately.  We had a lovely conversation.  We discussed that condo financing is more difficult than it was before but that I would do what I could to help.  I told him that I would need to get some additional information to see if traditional financing channels would be available on this particular condo.

 

I found out that FHA financing for this condo is not an option but conventional financing appeared to be available. This would mean additional out of pocket money for down payment and closing costs.

 

Fred said that wouldn't be a problem and said he was still interested.

We were ready to move forward for the prequalification.  I reviewed his credit and found that his credit balances were 78%-110% of his available credit, bringing down his score to below what was needed to qualify.  I suggested that he pay down his balances (a total of less than $1500) to improve his score and we discussed the total cost to purchase.

 

I got this email back:  Let's try to find a lender, maybe someone you know, someone that will finance the condo for me by putting the closing costs and down payment into mortgage, Including the not so good credit history of mine. I think it might be possible. Because, the condo is "only" $60,000. It's not like I am buying half a million home. 

 

While I wanted to say:  DO YOU NOT WATCH THE NEWS?  DO YOU HAVE YOUR HEAD IN THE SAND? WHAT ARE YOU THINKING?

 

 

Instead I said: I wish I could help you but the lending environment has changed and traditional fianancing won't allow the type of financing you are looking for. 

 

 

 

As I sent earlier, I believe that your score will improve by paying down the debt. Maybe you can have a family member who could help with the down payment and the closing costs??

 

 

His Answer? 

 

The problem is not not the money. I can get the money. It's just, i don't want to. Giving out cash these days isn't the smartest thing, I believe. 

 

 

 

Well, guess what?  That's what the banks think too!

 

 

 

THE LENDING ENVIRONMENT HAS CHANGED!  Size doesn't matter.  You have to be able to meet the guidelines of the home you are purchasing whether it's a $60,000 home or a million dollar home. 

 

 

 

There is limited 100% financing available, there are not as many grant programs for down payment/closing cost assistance and FHA is strongly considering lowering the maximum seller concession from 6% to 3% of the purchase price. Higher credit scores are required to qualify. 

 

 

 

WAIT!  Don't get discouraged and give up!  There ARE loans available. You just have to understand the lending environment and work within realistic guidelines.   

 

 

 

Contrary to popular belief, you don't have to have perfect credit, but you must be able to show an ability and willingness to pay.  You don't have to make a million dollars but you have to be able to document your income and show you are able to afford the mortgage along with your other obligations.  You don't need 20% down payment, but you will need to have at least 3.5% to put down on the home (unless you qualify for a VA loan or a USDA Rural Development loan).  

 

 

 

Don't listen to the hype, get the real answers by talking to a lender who understands the current lending environment. If you aren't ready now, then let's get a plan in place so that you can get ready.  If you are willing to listen and do the work, I will help to get you there!

 

 

 

 

 

By the way....If anyone knows a lender who has a program to fit Fred, let me know, I am happy to pass along the information.

 

 

 

GUESS WHAT?  THE LENDING ENVIRONMENT HAS CHANGED!

 

 

 

 

 

Warm Regards,

Bridget McGee  Maryland Mortgage Mama  NMLS# 196068  Corridor Mortgage Group.   410-960-2061 EHO   bmcgee@corridormtg.com or marylandmortgagemama@gmail.com

 

If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure! 

If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest.  Please contact me at 410-960-2061.

Comment balloon 2 commentsBridget "Mortgage Mama" McGee • March 03 2012 11:03AM

Comments

He probably has been discussing this with his buddies, who gave him the great advice he called back with you on.  I hope he comes to his senses - here he has a smart lender that was working it out for him and he's thinking of throwing his opportunity away.

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) over 6 years ago

Hi Bridget, I'm going to take a wild guess here .. Fred will be looking for a long time. Perhaps he'll end up talking to someone in Timbuktu who promises him that it can get done .. until the day before closing that is! And then, Fred will remember that very helpful loan officer in Maryland and e-mail Bridget McGee if she could possibly consider helping him again b/c as it turned out, her advice was spot on. :-)

Posted by Andrea Bedard, M.A.; REALTOR® Silver Spring, MD and beyond (Thompson Company, REALTORS®) over 6 years ago

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