Many real estate agents and potential buyers are wondering what kind of financing options are still available today. With over 10 years experience in real estate and lending, I know it is business as unusual, but these are amazing times! As soon as the market began to shift, loan programs began to change and for a while everyone waited nervously for the other shoe to drop.
Financing isn't something Realtors had to be concerned about until recently as home values have dropped and mortgage defaults have gone up. We know that the Subprime market thrived during the boom and imploded during the bust. The good news is that Hawaiian lenders are much more conservative than the lenders we've seen go out of business on the mainland. Yes, we are affected here, but nowhere near the proportion we've seen in California, Nevada, Florida, and the like.
The best starting point is to talk to your Realtor or lender about your situation before you decide you may not qualify. Don't be your own loan officer. You wouldn't want to be your own doctor or attorney I hope. A good lender is the key to your success in today's real estate market. They have the pulse of the market and will know how to get you to the finish line.
What I can tell you is this. The lenders that are alive and well today want to lend money. They will find a way to compensate for the current market conditions and will not stop lending money. The lenders that are running strong are still financially solvent for a reason, they were more conservative. Ok, so we will have to get used to some discipline now. The more educated Realtors are and the more communicative they are with their lenders of choice, the better for you.
We don't know what the future holds, we only know the facts right now. Loan programs are still conducive for financing real estate transactions. Rates are still extremely low, home values are very enticing, and we have a large selection of properties to choose from. If you bought your home at the top of the market and have seen your equity decrease dramatically, so have I. If you love your home and plan on keeping it, wonderful. Things will correct, but it will take time. Be patient.
If, on the other hand you bought at the top hoping to profit from your investment and now are not, that's ok too. You have options. Think about long term rentals, lease to own, seller concessions, etc. to attract what you need for your bottom line to make sense. FHA is now offering $300 Billion to help primary occupant homeowner's refinance their negative equity homes. If it just doesn't make sense anymore, than maybe it's time to sell. If at all possible, try to treat it like a liability on your balance sheet that needs to be corrected. As soon as you decide to 'cut your losses', you will be uninhindered to move forward in your financial life.
I encourage buyers and sellers to follow some basic guidelines.
If you are selling right now, let a professional Realtor assist you in pricing your property correctly to sell in TODAY's market. The market is changing so rapidly right now that last week's prices are dated. You really need to be ahead of the market and even a little below the market, if you truly want to sell fast.
The equity that you may hope to have isn't realized until you actually sell your home. So, maybe you only doubled your money and 2 years ago you could have tripled it. At the end of the day, it's a gamble to wait IF YOU NEED TO SELL. Don't let your remorse of what you could have done in the PAST prevent you to miss out on what you can do NOW. We can't change the past, and we definitely don't want to live there. We need to face the PRESENT together and move forward.
If you are thinking about buying. Ask yourself what is your goal? How long are you planning on holding on keeping your new home? If the answer is LONG TERM, then have fun shopping! Get a really strong pre-qualified letter from your lender asap. Make sure your Realtor has a selection of well versed and experienced lenders to choose from. Remember, your lender must be licensed in the state of Hawaii in order for you to close your loan. If you are on the mainland and want to use your own lender, verify their licensing upfront! Do the paperwork upfront-it will be the best thing you could do for yourself. If eligible, take advantage of the first time homebuyer tax credit for $7,500 available until mid next year. Check HUD's website for details. We don't know how long rates will stay low and if underwriting guidelines are going become more stringent in the future for investors, second home owners, even principal home buyers.
FEAR is a corrosive thread and it can be paralyzing. We don't need to watch the stock market go crazy and panic-or it will continue to do more of the same. If you are thinking about buying, don't wait for the bell to ring! Just like some sellers that waited too long to reduce their prices, we can see buyers doing the same-waiting too long to buy at below fair market value. If you are a reasonable person, a property properly priced should be compelling enough to enter the market.
Irregardless of what you decide to do, enjoy the journey if at all possible. I know I will.
Heather Michaud
Realtor (S)
Keller Williams Realty Maui
Sold
