Concerned clients are calling to ask about mortgage loans amidst news that banks are crumbling and banks are not making loans. Here are some of the facts:
1. Money is available. What is NOT available are many of the alternative financing options that fueled the market over the last 5-6 years. Stated income, no asset, zero down and sub prime loans are almost non existent. The government takeover of Fannie Mae and Freddie Mac have assured the retail lending institutions that they will continue to have a market for their loans. Home financing is readily available for qualified buyers seeking conventional and government (VA and FHA)financing.
2. Full documentation is required for loans today. Loans are often going through multiple levels of underwriting and credit review. Last-minute audits are common. Over-documenting loan applications is often the key to a smooth loan process in the current environment. Pre-approval for buyers is more important than ever.
3. Rates are very attractive. For instance, today a buyer can obtain an FHA loan up to $697,500 with only 3% down payment. This is a fixed rate 30-year loan! There is a one-point charge for the loan but it is common for the seller to pay this fee in the current buyer's market.
