Port Townsend Real Estate

Mortgage Loans Have Changed

Real Estate sales have undergone some drastic changes in the past 18 months, most noticeable being the prices of property and slowing of sales. 

Also important to you the buyers and sellers is the changes in mortgage loans under some new guidelines, actually rules by Fannie Mae and Freddie Mac, the government sponsored enterprises that purchase more than half of the home loans that are originated by your local bank or mortgage rep.   

1.  Appraisals are coming in lower and costing more money.   Under new rules, appraisors have to be drawn from a pool, not necessarily local and familiar with the neighborhood you are buying in.   Appriasors have also become very cautious and are trying to use sales only from the past 3 months, rather than the usual 6 months from past years.  They are having to do additional research and therefore charging more for the extra time it takes to complete the appraisal.  If your appraisal comes in lower and you really want the property you may have to put up more cash deposit, or ask the seller to lower the price.

2.  There is now a new "Risk based pricing" model which tacks on extra fees to people with lower credit ratings.  This would affect those with a credit score under 740.  They will be looking at your debt to income ratio, paying your bills on time and the amount of debt you are carrying.

3.  There could be higher points to pay for the loan you arrange just to get the advertised rate.  You should consider the amount of time you intend to stay in the home to determine how many points you are willing to pay.

4.  Fees have gone up for the entire loan process from processing locking in a rate, and for underwriting.

5.  Condos are in an even higher scrutiny since they are selling the least, with higher down payments, restrictions on sales with less that 70% occupancy, or complexes with high delinquencies on homeowner fees. 

Things to consider before you start house hunting, but with prices and interest rates at record lows, lots of inventroy to choose from, and the $8000 tax credit for first time home buyers (those that have not owned a home in the last 3 years of more)  how can you go wrong...it's a great time to buy.





0 commentsSandra White • August 04 2009 01:31PM
Mortgage Loans Have Changed
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