FHA Loan

I just read some shocking results of a homebuying survey, and I want to share with you what you should really know about buying a house in San Jose. Real Estate website Zillow just released results of a survey taken by first time homebuyers that revealed some shocking results of how knowledgeable they are about the house buying process. Now all you Realtors watching this, you may want to give your clients some home buying tips that can teach them what to know before buying a house. 47% believed that the home became theirs once everyone signed the purchase contract. and 42% believe that home values are guaranteed to appreciate by about 7% each year, when in reality, in a normal market it’s typically 2-5% each year, and we all know, we are NOT in a normal market right now. 41% of all new homebuyers believe they need to pay for private mortgage insurance, regardless of how much of a downpayment they’re making, when in reality, that’s typically true if you’re putting less than 20% down. And finally 37% of first time homebuyers believe buying homeowner’s insurance is optional. I’m here to tell you it’s not. That’s why every realtor, mortgage broker and insurance agent needs to take time to make sure our clients are aware of what to know when buying a home. If you want to take Zillow’s Buyer IQ test for free, you can click on this link. Buyer IQ test.

The richest man in India, who also is the 9th richest man in the world, had a 27 story, one billion dollar home built in Mumbai for him and 3 members of his family. The house of Mukesh Ambani is complete with 3 helipads and 6 floors of parking, but he’s afraid to move into it because it fails to conform to the architectual principles of vastu shastra (trying saying that 5 times fast), and he believes that moving in will bring bad luck to him and his family. Seriously dude? You’re the ninth richest man in the world, how much more good luck do you need? Superstition aside, he’s got every right to be afraid to occupy the house: it’s a billion-dollar eye-sore in the midst of a country and a city where most of the people are desperately poor. I say, Squatters, pack your bags and enjoy your new home.

The economy picked up during the third quarter as the gross domestic product came in with the largest increase in a year. While this is good news for stocks, it could have an affect on interest rates as money moves out of bonds and into stocks. So take advantage of these still low rates if you’re thinking about buying or refinancing your home. If you liked this video, please leave me a comment below, and click the subscribe button and share it with a friend. Remember to set your clocks back this weekend! I’ll see you next time.

If you are the average homeowner your probably getting sick of hearing every few months the catch phrase “historic low rates”. It’s about as common now as your local furniture store going out of business every other month. But as Mortgage Professional, we really do need to alarm people of every small window that opens up. Rates really are phenomenal as of today. How long that will last we do not know. If your a homeowner playing the market game, there comes a point where you need to pull the trigger and now is that time. Mortgage Bonds are trading higher and gaining back some of yesterday afternoon’s losses. Helping Bonds were alarming comments from European Commission President, Jose Manuel Barroso, who warned “it is clear that we are no longer managing a crisis just in the euro-area periphery” – meaning that the Greece debt crisis has in fact spread. He went on to say that a “rapid re-assessment of all elements related to the EFSF (European Financial Stability Facility) and concomitantly the ESM (European Stability Mechanism)” – meaning they all need to re-think the EuroZone rescue plans. The problems continue to get worse in Europe with seemingly no end in sight to the uncertainty – hence the reason why gold is trading at nearly $1700 an ounce. Stock markets are lower as investors continue to fret over weakness in the economic data that has been hitting the wires in the past month. The S&P 500 Index is trying to remain above its support level of 1,249. If prices fall beneath this floor, Stocks will attract more sellers and this could help Bonds.

While many experienced Maryland real estate agents have a general understanding of the mortgage approval process, there are a few important details that frequently get overlooked which may cause a purchase to be delayed or denied.

New Maryland regulation, updated disclosures, appraisal guidelines, mortgage rate pricing premiums, credit score, secondary approval layering, rescission deadlines, property type, HOA insurance requirements, title and property flip rules are just a few of the daily changes that can have a serious impact on a borrower’s home loan financing.

With today’s volatile lending environment, it’s obviously important for home buyers to get a full loan approval which clearly defines all contingencies that pertain to each unique home buyer’s scenario prior to spending any time looking at new homes with an agent.

Either way, we’ve listed a few of the top things your agent should keep in mind while showing you new properties:

Caution – Agents Beware:

Property Type –

High-Rise, Condo, Town House, Single Family Residence, Dome Home or Shoe House… all have specific lending guidelines that can influence down payment, credit score and mortgage insurance requirements.

Residence Type –

Need to sell one home before moving into another? Is a property considered a second home if it’s in the same city?  What if I’m buying a home for my children to live in, it is still considered an investment property?

These are just a few of several possible Maryland residence related questions that should be addressed by your agent and loan officer at the initial loan application.

Rates / Locks –

Maryland Mortgage Rates are typically locked for a 30 day period, and one of the only ways to get a new rate is to switch mortgage lenders.  Rates also have certain adjustments for property / residence type, credit score and down payment which could have a big impact on monthly payments and therefore approvals.

A 1% increase in rate could literally mean the difference between an approval or denial.

Headline News / Employment –

Maryland Underwriters watch the news as well.  Maryland borrowers who work in a volatile industry during hard economic times may have to jump through a few extra hoops to prove that their employment and income is secure.

Job changes, periods of unemployment or property location in relation to the subject property are other things to consider that may cause a speed bump in the approval process.

Title / Property Flip –

A Flip in Maryalnd is considered a property that has been purchased by an investor and quickly sold to a new buyer within a 30-90 day period.  Generally, an investor will do a little rehab work, fresh paint, landscaping…. and try to re-sell the property for a significant profit margin.

While it seems like a perfectly fair transaction, many Maryland lenders have strict guidelines in place that prevent borrowers from obtaining financing on properties that have a previous owner with less than 90 days of documented ownership.

These rules change frequently, and are specific to particular property types, so make sure your agent is aware of all the boundaries associated with your approval letter.

Homeowner’s Association Insurance –

Some Maryland lenders require Condos and Town House communities to have sufficient insurance and reserves coverage pertaining to specific ratios on units that are owner occupied vs rented.

It may also take a few weeks and cost up to $300 to receive an HOA Certification, so make sure your Due-Diligence period is set accordingly in the purchase contract.

Appraisal Ordering Procedures –

Maryland appraisal ordering guidelines are changing quite frequently as regulators implement many new consumer protection laws created to prevent future foreclosure epidemics.

Unfortunately, some of the new appraisal regulations have proven to slow the home buying process down, as well as confuse lenders about the true estimate of neighborhood values.

Maryland VA, FHA and Conventional loan programs all have separate appraisal ordering policies, so make sure your agent is aware of which loan you’re approved for so that they document any anticipated delays in the purchase contract.

For example, if an appraisal takes three weeks and the average time for an approval is two weeks, then it probably isn’t smart to write a purchase contract with a four week close of escrow.

For more information, please contact Bill Sohan at Academy Mortgage Corporation: 410-963-2308 or bill.sohan@academy.cc

www.yourbaltimorelender.com