Pinetop White Mountain Blog

Buyers’ Survival Guide to working with Mortgage Lenders in a Changing Environment

Simply put…. Things Have Changed.

The mortgage lending business is undergoing huge changes at a pace never experienced in the history of this business. Many of the important things you used to know about mortgage lenders have changed. Obtaining appropriate and reliable mortgage financing has never been more difficult or important than it is today. It’s important to avoid time-consuming mistakes and hassles during the process.

1. Prepare yourself for the process of obtaining a mortgage loan:

· All buyers must pre-qualify for a loan before shopping

· All borrowers now have to document income ~ get documentation ready now

· Borrowers must be completely honest about their income and assets

· Down payment requirements are increasing

· Credit policies are changing fast ~ what worked in the past may not work tomorrow

· Loan products and pricing may change between application and final approval

2. Credit Scores are important:

· Credit scores now determine pricing for mortgage loans ~ know your score

· Low scores = higher rates = lower qualifying ability = lower price of a new home

· If your score is low, take action now to improve it

· Credit Counseling can save you time and money ~ Call your lender first

3. Choose the right mortgage lender:

· You just can’t miss it ~ Mortgage lenders are failing at an alarming rate

· There’s a difference between mortgage “brokers” and mortgage “lenders”. Mortgage lenders have more control than mortgage brokers

· Working with an “at-risk” Broker means more risk for EVERYONE

· Understand the service and value you want ~ a low price isn’t always a good deal

· Product availability and pricing may change between application and final approval

· Working with a strong, reputable lender means you get your loan closed!!!

4. Write contracts with reasonable deadlines - (appraisals, loan approval and closing):

· Appraisals and approvals are getting harder in this market ~ allow time to get it done

· Quick deadlines create stress, confusion, amendments, and extra work for everyone

· Appraisers have new rules and standards are getting much tighter

· Investors are reviewing and evaluating appraisals BEFORE closing, asking questions

· Investors are externally re-verifying many types of income BEFORE loan approval

· Loan products and pricing may change between application and final approval

5. Be careful with seller concessions, incentives and discounts:

· Investor guidelines for seller paid incentives have changed dramatically

· Guidelines for acceptable incentives differ for Conforming and Jumbo loans

· A “creative” seller-paid incentive may create an un-approvable mortgage loan

· Credits for Inspection/Repair items may be handled differently than seller incentives

· Repair credits may need to be documented and escrowed

· Seller incentives can pay closing costs, then reduce the purchase price

· Be Prepared! Consult your mortgage lender for guidance before writing the contract
 

I am more than happy to give you a list of EXCELLENT Mortgage Lenders with whom I have enjoyed closings with NO surprises! There is no stress like an “iffy” closing!!!

Sandra Paulow, Associate Broker, GRI, SFR, REALTOR®

Russ Lyon Sotheby's International Realty Show Low, AZ.

(928) 242-0300

E-mail: sbpaulow@frontiernet.net

Website: www.whitemtnsazrealestate.com