News from lenders on changes to downpayment terms: June 16, 2008

Aside from rates going up, there are some pretty major changes taking place as well…  The following changes are supposed to be coming from the various mortgage insurance companies.  Some of them have already implemented them, some of them are on the way, but the bottom line is that this is widely expected to become universal.  If you have potential buyers that fall into these categories, I would urge you to have them double and triple check their pre-approval status.  The following situations will no long be eligible for mortgage insurance:

·        Condominiums over 90% loan-to-value

·        Second homes with credit scores under 680 and over 80% loan-to-value

·        Manufactured homes with loan-to-value over 90%

·        Investment properties with interest only loans over 80% loan-to-value

·        Investment properties with credit scores under 720 and over 80% loan-to-value

·        Investment condos with over 80% loan-to-value

·        Cash-out refinances (any occupancy type) with credit scores below 679 and over 80% loan-to-value

·        Cash-out refinances on second homes over 80% loan-to-value

1. At This time it is a buyers market.
2. A home is a long term investment. It has ups and downs
3. 1/3 of the homes today have no loans they are paid off. Home loans amount to 9.9 Trillion dollars. $150 Billion are sub prime loans. 1/2 of them are in forecloser. which is $75 Billion. That seems like a lot. But the stock market fell today 362 points which is more in one day loss then all the real estate foreclosers.
4. Main thing when purchasing a home is to make sure you understand what you are paying. When you are thinking about being a first time buyer. Understand the whole payment. Make sure you know what the taxes are and insurance payment is. This is called PITI. If it is not included in your monthly payment it is owed at the end of the year. Take the tax and insurance amount and put it in the bank every month. If your not good at that do not take the loan that does not include PITI. Principal Interest tax and insurance.
5. It is a good time to buy as well as sell. If you have a need. A real estate agent will show you different homes available. As you are searching my site you can see all the home available in the Milwaukee area.
6. If you are selling lower then maybe last year you will also be buying lower then last year. So you are trading dollars for dollars. You home is only worth what someone is will to pay for it. Also the final judge is the lender. They will send an appraiser to your home to make sure the home is worth what the buyer is paying for the home. This is determined on what has sold in your area over the last 3 months. They compare homes with the same features your home has.
7. Flipping homes in this market is not wise. Unless you know for sure you have a buyer for it. There is a 16% inventory of homes on the market right now. More homes then buyers.
8. Why is one home selling over another one. Choose the right agent. An agent better come with a bag full of tools to sell your home. No longer can you up a sign up and wait for 3 buyers to come along. Each prospective buyer that walks in your home is very important because they are looking to buy.
9. No one has a crystal ball on the real estate market or stock market. They both have ups and downs. Certain areas of the country are in worse shape then others because of the amount of investors that were betting  on this market to last. Again work with an agent that can tell you how your area, town, street is selling.
10. Remember when you buy a new home the taxes are based on the land value not the home. Your taxes will go up.
11. People have reasons to sell and buy a home. The time is right when it is right for you.
12. If you are behind on your home loan payments, first talk with your lender and see if you are able to work it out with them. If not put your home up for sale. Don't let the stress of trying to wait. The longer you wait the harder it is to get the lender to agree to a short sale.