Mortgage Money is Getting Tougher, Get a Good Professional

If you are thinking about getting in the market to buyer or sell a home, DON'T WAIT!  The mortgage side of the business is going through some major changes and it is already becoming harder to buy or sell real estate.  Mortgage money is drying up in several segments of the industry.

If your credit is shaky, getting a mortgage has gotten much harder and possibly impossible in most cases.

For those looking to do 100% financing, you may have already waited too long, unless you have VA (government guaranteed loan) benefits.  Another alternative may be to go FHA (government insured loan), where you will need 3% down plus closing costs.  The 3% can be a gift from family, but not the seller. 

If you have 10% to put down, you can still go conventional, but will most likely pay mortgage insurance.  Stated income/ stated assets probably not happening.  Stated income for self-employed only and even then getting tougher.

Jumbo Loans are also getting much tougher.  Many mortgage brokers are finding them impossible or at difficult to fund.  The primary lenders are still working them.  A Jumbo Loan in Hawaii is anything over $625,000 and over $417,000 in most parts of the country.  In Hawaii that is below the median priced home.

We do not know how this will all shake out over the next few weeks and months. So what does this mean for us? 

• Interest rates are still quite low, but may be climbing.
• If you are waiting to get in the market.  Stop waiting!
• If you are in escrow to buy a home lock your loan as soon as possible.
• Choose a funding lender to get your pre-approval from.  Many sellers and their agents are not taking letters from brokers too serious.  I personally have seen two fall out of escrow after the broker said they were good to go.
• Seller's need to also be prepared for more days on the market and less buyer able to get financing especially on homes that are price above the jumbo loan threshold.
• Buyers and seller need to work with top professionals.  In this transition market it is no place for amateurs.

Good luck, it is still a good time to buy or sell real estate on Oahu.  We just need to adjust to what the lending industry is doing.