Current Mortgage Lending Conditions

[galentjm]

Given the current credit crunch and the understanding that it will take time for any bailout bill (which I think one will eventually come to pass) to take affect, I was curious as to what the current mortgage lending environment is like. My wife and I are in the process of relocating to the D.C. area from NC and we'll be looking to buy up here some time around January. For folks currently working in that industry, or buyers who have recently obtained loans, what its like out there?

I make a decent living, have good credit and will be able to make a decent down payment, but given the number of financial institutions going belly up I would imagine its tough to get a loan even for "low risk" consumers like myself. I'd like to take advantage of the current housing market in this area, but should I be concerned about my ability to obtain a loan?

Thanks in advance.

[Destino]

It's not hard to get a loan.

For people relocating often the hardest part of qualifying is proving their income. If you are with the same company no problem, but if you are relocating and only one of you has a contract and the other plans to "find a job" using the income a couple expects to qualify with is sometimes difficult.

[PleaseBlitz]

Destino is right. You cant get 100% financing and state your income anymore, but if you make a good living, have good credit, and can put some cash down, you'll be fine.

If you want to talk to a real live LO, PM me and i can put you in contact with some good ones.

[jbooma]

Given the current credit crunch and the understanding that it will take time for any bailout bill (which I think one will eventually come to pass) to take affect, I was curious as to what the current mortgage lending environment is like. My wife and I are in the process of relocating to the D.C. area from NC and we'll be looking to buy up here some time around January. For folks currently working in that industry, or buyers who have recently obtained loans, what its like out there?

I make a decent living, have good credit and will be able to make a decent down payment, but given the number of financial institutions going belly up I would imagine its tough to get a loan even for "low risk" consumers like myself. I'd like to take advantage of the current housing market in this area, but should I be concerned about my ability to obtain a loan?

Thanks in advance.

down payment is the key, expect to pay a lot of closing costs and pmi now unless you can put down 20% no more combo loans to get out of that

home prices are down so you can negotiate down quite a bit, which is great for buyers, you may want to do a loan right now with a credit union or a bank that was not involved in the subprime mess

[dockeryfan]

It's not hard to get a loan.

I was listening to an interview on the radio regarding new car sales. This owner of a car dealership was saying that even individuals with very good credit are being denied for car loans.

Now cars are different than houses, but I have to think if credit is tighter for car sales, it's tighter for home sales.

The proof will be when you start talking to banks. Let us know what they say.

[Destino]

The proof will be when you start talking to banks. Let us know what they say.

I'm a loan officer and I can tell you, it is not hard to get a loan. If your credit isn'd bad and you make enough money where buying is reasonable you should be able to get a loan.

As for Jbooma, he's right about mortgage insurance. Combo loans are almost entirely gone so the most common ways of avoiding MI is to bring 20% to the table. I disagree with him about closing costs though, in this market closing costs should be shifted onto the seller.

[MurrayH81]

I want to know where this credit crunch crapola is coming from.

Yesterday, I received two unsolicted email offers for credit with no credit checks, and 2 phone calls offering to reduce rates on any credit I had.

Oh, is the crunch for people who overly leveraed their assets, or made other risky business/personal decisions and want someone to prevent them from going under?

Is that what is meant by this whole "Economic Destruction" scam being jammed down our throats is about?

[RonJeremy]

Lending Guidelines have become more restrictive BUT the scenario you laid out works in today environment. I am not having trouble getting people with good credit, verifiable income, and a little down payment a mortgage.

Now the self-employed's who don't want to or can't prove their income....or folks that want 100% financing....or have marginal credit...sorry, can't help you.

[PeterMP]

I looked at refininacing about two weeks ago (over $200,000). Several places were going to give me money at under 6.5%. They were even talking about how much I wanted over the value of the mortgage.

[RonJeremy]

down payment is the key, expect to pay a lot of closing costs and pmi now unless you can put down 20% no more combo loans to get out of that

home prices are down so you can negotiate down quite a bit, which is great for buyers, you may want to do a loan right now with a credit union or a bank that was not involved in the subprime mess

OP - you will have to put 20% down if you want to avoid mortgage insurance.

Get the seller to pay closing costs (max of 3% of the sales price on a conventional loan).

Good luck!

[RonJeremy]

I looked at refininacing about two weeks ago (over $200,000). Several places were going to give me money at under 6.5%. They were even talking about how much I wanted over the value of the mortgage.

That all depends on the value of your property vs. what you currently owe. Cash out refi's are a max of 85% loan to value these days. As long as you stay at 85% or below AND you have good credit you can cash out. But if you go to 85% you will have to pay mortgage insurance.

[BRAVEONAWARPATH]

You might want to go the FHA route.

[zoony]

So basically, if I hear RJ correctly, things are back to normal. Good.

Housing loans SHOULD require proof of income. Housing loans SHOULD require money down. :applause:

Good luck to the OP in your move - and might I suggest hitting RJ up to help with your loan. He's a stand up guy. Also, Spaceman Spiff and Destino are both realtors I think.

[PleaseBlitz]

I want to know where this credit crunch crapola is coming from.

Yesterday, I received two unsolicted email offers for credit with no credit checks, and 2 phone calls offering to reduce rates on any credit I had.

Oh, is the crunch for people who overly leveraed their assets, or made other risky business/personal decisions and want someone to prevent them from going under?

Is that what is meant by this whole "Economic Destruction" scam being jammed down our throats is about?

OLS, thats funny.

Spam = evidence of economic prosperity.

[PleaseBlitz]

So basically, if I hear RJ correctly, things are back to normal. Good.

Housing loans SHOULD require proof of income. Housing loans SHOULD require money down. :applause:

Good luck to the OP in your move - and might I suggest hitting RJ up to help with your loan. He's a stand up guy. Also, Spaceman Spiff and Destino are both realtors I think.

Spiff is a great realtor, Destino is a loan officer.

[Destino]

Housing loans SHOULD require proof of income. Housing loans SHOULD require money down. :applause:

Imagine that. lol

[RonJeremy]

So basically, if I hear RJ correctly, things are back to normal. Good.

Housing loans SHOULD require proof of income. Housing loans SHOULD require money down. :applause:

Good luck to the OP in your move - and might I suggest hitting RJ up to help with your loan. He's a stand up guy. Also, Spaceman Spiff and Destino are both realtors I think.

Zoony - In a nutshell, yes.

I first got into the mortgage biz in 1994. The US was on the tail end of a recession. Back then, inorder for someone to obtain a mortgage you needed the following:

- Income verified through paystubs (salaried people) or tax returns (self-employed).

- Bank statements verifying that you had had enough money for at least a 5% down payment (conventional), 2.75% (FHA), or no down payment for first-time buyers (varied by state..funds come for an tax exempt bond issues) or VA loans...and have some cash reserves after closing.

- Your monthly debts including your new mortgage couldn't exceed 36% of your gross monthly income...some exceptions made on a case by case basis.

- Good credit.

- Property must appraise for at least the sales price.

Other than the debt ratio, we are pretty much at this point again. People have to PROVE they can afford the loan, show a history of savings, good credit and put some money down.

Gone are the No Income/No Asset loans, No Ratios, Stated Income, 100% loans (except for some state funded 1st time buyer programs)....and the Option ARMs (have a negative amortization component).

Bottom line, people that can afford a home should be fine.

[Heidenreich]

The way house prices are falling its time for me to start thinking of buying.

I've seen plenty of houses that with no money down (by my calc), would still cost me less per month than what I'm paying now in rent. That makes it a no brainer.

I just have to A)- decide if I'm really going to be serious about this, and - how much cash I have to come up with for a down payment, because I don't have 20% right now, thats for sure.......

[Destino]

I just have to A)- decide if I'm really going to be serious about this, and - how much cash I have to come up with for a down payment, because I don't have 20% right now, thats for sure.......

5% for conventional loans. 3% for FHA.

[galentjm]

This is really good info. Thanks to everyone that responded.

[jbooma]

I'm a loan officer and I can tell you, it is not hard to get a loan. If your credit isn'd bad and you make enough money where buying is reasonable you should be able to get a loan.

As for Jbooma, he's right about mortgage insurance. Combo loans are almost entirely gone so the most common ways of avoiding MI is to bring 20% to the table. I disagree with him about closing costs though, in this market closing costs should be shifted onto the seller.

correct sellers are desperate so you might get them to cover a lot of the closing costs and especially repairs to the house

the other thing i would add is people make a mistake by trying to "time" the market, if you found a house you like you can afford and get a good deal on it then go for it, these are "supposed" to be long term investments, many people try too hard in the get rick quick themes and get themselves in trouble or complain because they were not able to take advantage of certain conditions

[LightAgent]

You might want to go the FHA route.

I'm a LO in DC this would be your best course of action. PM me if you want to move forward:eaglesuck

[RonBurgundy&Gold]

Passing the closing costs on to the seller works, but w/ the market so saturated w/ short sales and REOs, that can be difficult. In my experience working for the bank, there is no covering of closing costs. In my experience working w/ the bank to purchase an REO, they won't even fathom paying closing costs.

Then again, the deal you are going to get on a short sale or REO property sort of outweighs the negatives of paying closing costs out of pocket.