Pinetop White Mountain Blog

Good Evening Everyone,

As a Real Estate Professional I try to keep up on what is happening in all the industries related to the Sale of Real Estate including Lending, Title Issues, Etc.  However one area that is very hard to keep current on these days is lending.  I recently learned, mostly because I haven't done much with it in many years, that FHA Loans can only be used for a Primary Residence Purchase.  If you are thinking you might be able to get a second home or summer get-away via FHA, think again.  It isn't going to happen.  FHA does not lend on secondary residences unless the circustances are very unique.  I am not going to try and explain this as I am not a lender or an expert.  The only reason I mention it is because as a buyer you need to know you cannot depend on FHA for a secondary property.

Another factor that figures prominently in today's lending industry is whether you have a regular job that pays a salary or whether you are self employed. 

If you are employed and receive a regular salary and your tax returns show that you have a good income, have been at your job for quite some time, and your credit scores are good, you should not have too much difficulty in finding financing, at least for a primary residence.  Again, second homes are higher risk and it is likely that you will need more cash money up front than you might have a couple of years ago. 

If you are Self-Employed it is much more difficult to get a loan. Stated Income loans are much harder to acquire any time, even for a primary residence, because the tax returns often don't show a lot of net income.  Income must be proven through other sources and even then it is likely to come with a higher price tag in terms of down payment requirements and interest rates.  It doesn't seem fair, but unfortunately that is the way it is. 

My point here is to remind you that when you are applying for a loan it is vitally important that you work with a trusted lender, an experienced loan officer, and that you  be straight and honest when you are talking to them for the first time.  There is nothing more disappointing than to start out with high hopes that you are buying a home, whether it be your first home, a summer home, or a retirement place, or whatever, only to find out half way through the process that you either can't get the loan or will need a lot more cash down than you had expected.  Many a Buyer and Seller have been disappointed this year when the loan falls apart at the last minute, either through dishonestly by the buyer or just underwriting guidelines that are much stricter than they have been in the past.  Lenders these days are very very picky about who they lend to and if there is any doubt about your ability to repay that loan, it won't happen.  It is disheartening for everyone involved when things fall apart due to loan issues. 

So get out there, get pre-approved, make sure you are qualified and know your price limits, and then give your friendly neighborhood REALTOR® a call to find the home you are looking for.  The choices are many and the buyers are few, so it really is a great time to buy if you know what to expect from the get go!

SANDRA & BRUCE PAULOW, REALTORS®

RE/MAX Pine Country Realty in Show Low, Arizona.  (866)537-9001