This type of credit approval can be received within hours or even minutes on my own computer at my desk, or even in the clients home while sitting at the kitchen table, talking over coffee while we wait. If I choose to use a lender who does their own automated underwriting in house, because they have a better rate or something, then I just fax over the application and a few other pieces of paper and they do their own impute of the information and get back to me by later that day or the next day.  Pretty impressive huh?  For the last 20 plus years, it could take upwards of two weeks to even a month to verify all of the information and get a formal approval, now it's just minutes or hours to get the same approval.

Now, if your credit scores are lower, under 620, or there are a few derogatory accounts, maybe with unpaid collections, bankruptcy, or other problems similar in nature, then you will probably receive something called a "referral" which means that the human underwriter will have to see everything and underwrite it with his/her own understanding of the "old" guidelines with some changes and exceptions. Example of changes:  In past years if you had filed for bankruptcy, two years had past, and you were able to establish new credit with no other derogatory credit since, I could get you a good loan with the most competitive rates anywhere, just the same as any other loan. Not true today!  Fannie Mae now says it has to be at least 4 years since the discharge to even consider you for one of their loans. Other lenders called "Sub-prime" lenders will take you with far more money down and much higher rates and fees.  This is all called Risk Management Based. This might not all be so bad, if your credit report is truly accurate and the credit scores reflect that.  But there are those clients who have inaccurate information or the credit scores were a direct result of something beyond their control, like medical problems or an accident, which don't show in the report.  BUT, then you can provide the pertinent information and get a slower approval, but an approval non the less.

Interest rates continue to be relatively low. Not as low as in October of 1998 but still very good!  It is still possible to get conforming loans ($240,000 or less) in the mid to high 6's with points, or even 7% with no points depending on the day and the lock frame.  The Jumbo loans tend to be approximately a quarter to three eighths higher on the interest rates than the conforming loans. 

The rates seem to move around with a lot more volatility then in the past, but with less movement upward or downward.  Over all, the rates seem to be much more stable and staying in the lows for a much longer period of time. If you loose a particular rate that you are looking for, it can be lost within hours, but it seems to come back, at least close to the old rate you wanted, if you wait long enough.  Days or even weeks later you might be able to get within an eighth to a quarter percent of what you originally wanted.  Maybe even get what you wanted.  What does this teach us?????? If it's what you want today, TAKE IT NOW-IF YOU CAN!!  Don't wait even an hour to lock. You might not see it again in the time frame you have to work with, especially in a purchase.  But, at least currently, if it moves away, it won't go too far away, if you just wait long enough.

The fast fury of lightning speed sales, with multiple offers, isn't happening as often right now, unless the property in question is priced right and perfectly clean, then we still see some fast movement.  Otherwise, the homes seem to have the signs up longer than a few months ago.  Values have risen and according to recent statistics the average single family home in Fremont is $340,000 and the average town home/condo is $180,000.  No wonder many of our kids are leaving the state to afford a house. But if you have a high tech job here in the Silicon Valley and can afford to qualify and pay for a home here, the values currently are still going up and the values are good.

Last week I spent 4 days in Newport, Oregon where my son Aaron's family is moving to. I saw homes available with acreage that sold for under $100,000.  I also saw, and was in, one home a block from the beach that was a gorgeous two story with a view of the ocean, approximately 2800 sq. ft. and a ¾ acre lot for approximately $180,000. A similar home in Fremont would go for over $500,000 - $700,000 depending on it's location. I also saw a darling little lot with one home that had a mother-in-law unit in the back that sold for $95,000. It was also one block from the beach and about ¾ acre. Now too bad they don't have the jobs and the money up there too!

First time home buyers programs are being created every day to help the situation here in the Bay Area.  There are some programs in certain towns that will even lend upwards of $30,000 towards the down payment and closing costs, if you purchase and live in certain areas in their communities. Hayward is one of those towns and we are an approved lender to originate those loans as well as in other towns. 

MCC, mortgage credit certificate money is also becoming available again to help individuals and families with certain income limits to help qualify to purchase their first homes and get it. We are approved for that use too.

VA and FHA loans are still popular as a financing option but because of their maximum loan limits, they fit some areas around here better than others. We have also been approved to do CAL VET loans!  That is pretty major. In the past, CAL VET did their own loans only.  Now they are allowing us to package the files and help the veteran get the transaction completed.

The high loan to value loans like the 125% LTV loans are going away more and more, as problems are seen with those types of loans being promoted and clients finding out that they really CAN'T deduct all of that interest in many cases after they have already encumbered their homes for them. I have also read many articles about companies advertising on the television and radio who have been investigated and sued by the government and regulatory agencies for various violations having to do with charging added interest, etc. to the loans, and improper and undisclosed practices. Mistakes are made sometimes, but an on going practice of violations is a different issue.

Over all, the mortgage industry is still a solid industry in spite of the many and various changes that it is going through.  All of us who have decided to stay in the loan business for the duration of our careers are doing all that we can to become technically advanced and make the changes necessary to stay ahead of the ball game and help our clients receive the very best and up to the minute service. 

 

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