Home Financing – The reality of the Mortgage and Real Estate market today!
By Selwyn S. Jamurath – GC Financial Services
Let’s take a break from our normal discussion about obtaining a mortgage.
I bet you’re wondering “What in the world is going on in the mortgage and real estate market?”. With all of the contradictory news daily, everyone is confused. I’ll share what my take is on this chaos, based on my experience and my dealings with the mortgage banks.
Obtaining a home loan today is different from the last 3 years past. Today an approval from a bank is not worth the paper it is written on. I say this because banks are behaving irrationally based on the current state of the market. This is not a bank bashing article, however it is the information that you need to know to successfully navigate the loan process NOW!
I’m finding that even though the interest rates have been lowered, prospective buyers are not having an easy time getting approved and if they do, getting the loan closed is a challenge. It is a challenge because the market is correcting itself and it will be painful because the banks themselves aren’t sure which direction they’re going. Because of uncertainty in the mortgage industry, banks are not guaranteeing that your approval is solid. Countrywide, the largest mortgage bank in the U.S. is being acquired by BofA. Citibank is accepting large cash infusions from overseas investors, and Chase is looking to acquire Washington Mutual, not to mention the 300+ mortgage banks that have gone out of business within the last 24 months! The rash of foreclosures in the U.S. has driven the market down. Because of these events, your approval can be declined at any time for any reason.
Is this the end of the world? No. This just means that your expectations should be realistic. There aren’t mortgage and real estate brokers on every corner any more. That’s because many of those individuals were not in the business to take care of YOU. They were looking for a quick buck and fraud was running rampant in those environments. You can’t get a loan with a handshake anymore. You have to produce credible documentation that will be checked and verified several times over. Take a good look at who is currently active in the business and that will tell you that they’re in the business to take care of you. They have built a solid reputation by sincerely taking care of their clients.
Here’s the good news! Home prices are the lowest in years and if you’re waiting for them to go lower, you’re gambling. This is the time to buy! This is also the time to get a great deal on your refinance since interest rates are low. Not everyone can qualify for a great rate, but it’s worth giving it a shot! You have nothing to lose and everything to gain.
Go into the game knowing that you have to qualify the old fashion way to obtain a home loan. If you keep your expectations realistic, you’ll have a great experience with your finance professional and Realtor.
These days we have a lot of choices and the best way to learn about these choices is to ask your loan professional. My team of professionals and Real Estate partners can assist you and answer any questions that you have regarding home purchase, refinance or foreclosure. We are well versed in all aspects of these topics and best of all…we’re local.
We’re not finished yet. We’ll continue with the loan process next month. We get back on topic and talk about how to meet the conditions on your new loan approval to close your loan. Remember…This is the time to buy!