I often lack words to describe to my clients exactly how mind-bogglingly fast the world of mortgage lending is changing lately. Home buyers not only need good credit, a steady income, and piles of documentation to back all that up.. . . . . you need to be aware that loan guidelines change near-daily.
Yep. Nearly daily loan investors make changes to their rules about what they’ll lend on, what they won’t, who qualifies for a mortgage and who doesn’t, and how to properly fill out 9 inches of forms in triplicate to get the loan money.
I subscribe to a daily email that discusses changes in lending standards throughout the industry. It’s usually 2 pages long. Two pages of changes in loan guidelines per day!
Don’t assume you’re going to have zero trouble getting approved for a mortgage. If you have excellent credit you’ll probably get approved, but you’ll have to produce more paperwork than you can imagine.
Get approved. Then start shopping. Trust me. You don’t want to spend weeks looking online at this:
only to be told you’re approved for a mortgage to buy this:
Want to get pre-approved? Our favorite lenders, in no particular order:
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Kevin Reiser, AmeriFirst Loans, 480-289-7635
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Andrew Schmidt, WJ Bradley Mortgage, (602) 999-1912
Heather Barr is a Realtor. She's a chow hound, a gym rat, and the only political junkie in the USA who can actually keep her political views to herself. Instead, she focuses on educating her clients about the often-confusing world of residential real estate.
Tagged as:
From the Trenches
This is a pile-on to Chris’ recent post explaining the new Good Faith Estimate form . . . . I just received an email from a Loan Officer (“LO”) friend reviewing some rule clarifications issued by HUD after a February 18, 2010 meeting with a bunch of FHA mortgage investors.
LO Question: “When are consumers entitled to receive a Good Faith Estimate (GFE)?”
HUD Answer: If a consumer has an executed purchase contract, a GFE is required. Until that point, LOs can issue “worksheets” which are “useful for generic rate quotes.”
HUD guidelines for “worksheets” - -
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Worksheets should not look like GFEs,
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A worksheet should never should be used “in lieu of” a GFE,
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Consumers do not have to show an “intent to move forward” with a mortgage in order to obtain a GFE.
I’m assuming the Loan Status Report (LSR) in use in metro Phoenix which must be submitted along with any purchase offer falls under HUD’s “worksheet” rules.
What’s It Mean for Home Buyers?
Loan Officers can still give you a rate quote that’s not binding. However, once you have an executed purchase contract on a specific home, Loan Officers must issue you a GFE and per HUD’s new GFE rules, those numbers can’t change very much.
Buyer, if you got an LSR/worksheet that said 5.00 interest rate and $1,200 in closing costs. . . but when you got your signed purchase contract on your Dream Home you got a GFE that showed closing costs of $5,300 on a 5.375% rate. . . you can cancel your purchase without penalty.
Heather Barr is a Realtor. She's a chow hound, a gym rat, and the only political junkie in the USA who can actually keep her political views to herself. Instead, she focuses on educating her clients about the often-confusing world of residential real estate.
Tagged as:
From the Trenches
