The Straight Truth

Lending and life unfiltered

By Jennifer Ready | Mortgage Broker
or Lender in California

Multiple offers oh my! 3 tips to compete

In the last four months we have seen the demand for homes skyrocket as the inventory dwindles. What this means is that although there are great deals still around you may have to fight for them especially in ultra competitive price ranges. If you are going to battle for a house you want to make sure you are prepared to win. You don't go to a gun fight with a knife and you should not go home shopping today without a strategy. In order to plan your startegy you have to know how sellers think. Below are some of the top questions listing agents and sellers consider when reviewing offers.

1) How much are they offering? Seems basic right but a lot of people are under the impression they can low ball if they have cash and win. Wrong! Those days are gone. Lending, although still intensive, is not as tight as it was two years ago so the majority of sellers are willing to take the risk on a person getting a loan to net the higher profit. If you are in a multiple offer situation you need to lean on your Realtor to see what to offer. It will be over asking so be prepared. If their are 15 offers and you will not go over the asking price you will lose and you will be wasting yours and the Realtors time.

2) Will this close? This is a very important question when reviewing buyers who will be obtaining financing. A listing agent is always going to be more likely to take an offer with a lender they know can close the deal. They can tell their seller the loan will close which is a powerful sentence. It is like picking an airline to travel with. You are less likely to go with ones you do not know. Cheapo air anyone? Pass. It may be great that XYZ mortgage online is offering you the lowest rate every but you may never get the loan because no seller will want to take the risk. Having a lender people know in the community can help you a ton. Not just a brand like Wells or Bank of America but the actual loan officer. Reputation is everything in lending and Real Estate. As a lender we work very hard to make sure Realtors have no issues on deals we work on. That way when they see a preapproval from us they know the borrower is golden and will close which helps the borrowers odds of being chosen

3) How fast can you close this? If a seller has two similar offers they often will go with the fastest close. Having a lender that can close quick is a nice negotiating point and it does not cost you any additional money. See if your lender can close in 20 days if they have to. If they cannot you need another lender.

www.Readybell.com

Buying a house after a short sale: what you need to know

Short sales are very comman these days and as a home owner who has short sold your home you can often think that you will never be able to buy again. That is so far from the truth!

When You Can Buy Again

2 years after a short sale you can qualify for a conventional loan as long as you have 20% down.

3 years after the short sale you can qualify for a FHA loan with as little as 3.5% down. That is the same for foreclosures. There is not a higher rate because you had a short sale either!

The Details:
1) Your credit score needs to be over 640 so if you only went late on your home, your credit is probably above that. If you went late on everything and have active collections you probably are not at 640. Ideally you only went late on the house
2) You need to be able to show that you had to short sale. If you made $120,000 and your payment was $1000 a month and you now make $90,000 and want to buy a house with a $2000 per month payment that will not work. It has to make sense which 9 out of 10 times it does.
3) If you are in the process of short selling your home you should keep a copy of the hardship letter you sent to the short sale bank as well as the closing hud and tax returns for that year and the year prior. Having that documenation available will make your loan a lot smoother as we will have the documents instead of trying to recreate what went wrong

Had a short sale and thinking of buyng again? Call or email today to qualify!

Jennifer Ready 707-478-0637 & 714-701-6433
Julie Bell 415-378-2536
www.Readybell.com

Homepath VS FHA. The Battle Royale

Effective April 9th, FHA once again raised their monthly mortgage insurance. With the new raise Homepath is the clear winner. With FHA you are putting ½% more down and end up with a higher loan amount and higher payment. Homepath is the way to go!

Let’s look at the math

Homepath VS FHA

Purchase price:	$ 250,000	$250,000
Down payment:	3%	3.5%
Upfront MI financed into loan	0	1.75%
Loan Amount:	$242,500	$245,471
Est Rate (No points)	5.25%	3.875%
Principal and interest payment	$1340	$1154
Monthly mortgage insurance	0	$256
Est taxes and insurance	$360	$360
Total Monthly Payment	$1700	$1770

Beyond the upfront and monthly savings Homepath does not require an appraisal. Why pay more for a potential headache? Also, with Homepath investors and 2nd home buyers can put down as little as 10% with no mortgage insurance. Homepath is the way to finance Fannie Mae foreclosures☺

Call or email today to get qualified for a Homepath loan!

Jennifer Ready , NMLS #247743 Julie Bell, NMLS#240206

707‐478‐0637 & 714-701-6433 415‐378‐2536

jready@mmcdcorp.com jbell@mmcdcorp.com

www.ReadyBell.com

House shopping rule #1

The first rule to House shopping is to know what you can afford and be qualified for a loan by a loan professional. Loan professionals do not charge you to qualify for a loan so there is absolutley no reason to skip this very important first step. A loan professional can help you understand what your monthly payment will be in various situations and can also figure out how much you qualify to buy. Going home shopping or browsing without this information is akin to driving across the country without a map or navigation. It is a BAD idea.
Often many potential buyers start with the Realtor and want to look at houses without getting qualified for a loan. Their theory is that they have been on line and based on the online calculators they can qualify for $xxxx per month. The online calculations are not always accurate and banks do not qualify you based on what you think you can afford but rather what THEY think you can afford. A good loan professional will also help you find the right loan for your situation and if you are not qualified to buy right now, they will put you on a path for the future. This is very important. You need a lender/loan professional who will work with you for the long term.

Thinking of buying a home? Let us get you qualified today!

Jennifer Ready 707-478-0637 or 714-701-6433
Jule Bell 415-378-2536
www.Readybell.com

Where the market is and where we are heading

The first few months of this year have been much busier than they have been in the past three years. Generally January and February are the slowest months of the year giving many people in the industry time to pause, take a breath and recalibrate. This year has been unlike the others. It has been a whirlwind of excited buyers, multiple offers and limited inventory.

This is great news for our battered housing market. If we can keep this momentum we may see an upward swing in terms of prices which is great for current homeowners and for our economy as a whole.

There are still tons of foreclosures but the government is attempting to implement new ways to keep them off the market. My suspicion is that this is due to it being an election year and our current administration cannot handle and more bad press. Basically they have realized that dumping foreclosures on the market does not help the economy. Yes, I know this is shocking. Like adding flour to water, if you put too much flour all at once it will never work. You have to slowly add as you stir.

Here are their plans:
1) Selling foreclosure properties in bulk to investors. Are big investors getting killer deals and then flipping the properties on the market to sell to homebuyers at a profit. Yes.
2) Fannie Mae announced instead of selling foreclosed properties they are going to start renting them. This will eliminate a mass foreclosure inventory and they will slowly turn them (list for sale) on to the market as it can bear it.
3) I have also heard from multiple sources that the larger banks have been advised to hold their inventory and trickle it in.
4) Harp 2.0; the new and improved refinance loan for people underwater.

Time will tell how these plans work but what we will continue to see in 2012 is an increase in short sales to fill in the declining foreclosure inventory. This means that homebuyers will still have tons of opportunity but that hopefully current homeowners will see an increase in their values.

FHA raises FEES 4/1/2012

FHA has lost its way. Once a loan designed to help and protect home buyers it has morphed into a very expensive low down payment loan. Once a great loan for borrowers as of April 1st it becomes a loan with questionable cost

They are
1) Raising the upfront mortgage insurance premium from 1 to 1.75% of the loan amount
AND
2) Raising the monthly mortgage insurance
1.25% annual premium for loans under $625,500 a .10% increase
1.5% annual premium for loans over $625,500 a .25% increase

So if you are currently qualified for an FHA loan I suggest you start shopping serious so you can lock the loan down before the fees increase. You need to be in contract before April 1st to use the current lower fees, Also you should call and see what else you qualify for. We may be able to save you money with another loan.

Jennifer Ready 707-478-0637 714-701-6433 jready@mmcdcorp.com
Julie Bell 415-378-2536 jbell@mmcdcorp.com

www.readybell.com

FHA is about to get more expensive due to our Fantastic (Hardly) adminstration

The Obama administration in yet another move to stall our housing economy (they say save all indicators and historical data points to stall) has decided that the annual mortgage insurance premium on FHA loans should be raised again. Yes, again. This was part of their FY 2013 budget they just sent to Congress.
A brief history of Mortgage insurance: It was raised from .55% to 1.15% last year which horrified lenders and borrowers. Not paying any attention to the negative circumstances they created and increased borrower hurdles they created they are increasing it again. Apparently, the Obama administration needs a reminder lesson on cause and effect.

The New Increases:
1.25% annual premium for loans under $625,500
1.5% annual premium for loans over $625,500
Example of why this is horrible: On a $700,000 loan that is an extra $204 per month, making the monthly mortgage insurance $875 per month. That is a very nice car payment except there is no car and it does not go towards anything tangible for the borrower.

Why: They claim that FHA's delinquencies are increasing, which they are. But they are not on loans originated in the past few years but rather loans originated when FHA had very loose credit score requirements and allowed the borrower to do 100% financing through down payment assistance programs. AKA 4+ years ago. Also they are not on the higher end loans yet that is who is being hit the hardest. Seems fair?
When: The changes are expected to occur in mid April.

www.Readybell.com