Hawaii Randy's Real Estate Opinions: Mortgage Money is Getting Tougher, Get a Good Professional

Mortgage Money is Getting Tougher, Get a Good Professional

DollarsIf you are thinking about getting in the market to buyer or sell a home, DON'T WAIT!  The mortgage side of the business is going through some major changes and it is already becoming harder to buy or sell real estate.  Mortgage money is drying up in several segments of the industry.

If your credit is shaky, getting a mortgage has gotten much harder and possibly impossible in most cases.

For those looking to do 100% financing, you may have already waited too long, unless you have VA (government guaranteed loan) benefits.  Another alternative may be to go FHA (government insured loan), where you will need 3% down plus closing costs.  The 3% can be a gift from family, but not the seller. 

If you have 10% to put down, you can still go conventional, but will most likely pay mortgage insurance.  Stated income/ stated assets probably not happening.  Stated income for self-employed only and even then getting tougher.

Jumbo Loans are also getting much tougher.  Many mortgage brokers are finding them impossible or at difficult to fund.  The primary lenders are still working them.  A Jumbo Loan in Hawaii is anything over $625,000 and over $417,000 in most parts of the country.  In Hawaii that is below the median priced home.

We do not know how this will all shake out over the next few weeks and months. So what does this mean for us? 

  • Interest rates are still quite low, but may be climbing.
  • If you are waiting to get in the market.  Stop waiting!
  • If you are in escrow to buy a home lock your loan as soon as possible.
  • Choose a funding lender to get your pre-approval from.  Many sellers and their agents are not taking letters from brokers too serious.  I personally have seen two fall out of escrow after the broker said they were good to go.
  • Seller's need to also be prepared for more days on the market and less buyer able to get financing especially on homes that are price above the jumbo loan threshold.
  • Buyers and seller need to work with top professionals.  In this transition market it is no place for amateurs.

Good luck, it is still a good time to buy or sell real estate on Oahu.  We just need to adjust to what the lending industry is doing.

 

--------------------------------------------------------------------------------------------------------

Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 21 commentsRandy Prothero • August 09 2007 05:04PM

Comments

Randy -- Great info and advice from a very knowledgeable Realtor.  If any one has a loan floating they need to lock it NOW  Aloha
Posted by Bruce Bourgault, Vice President, Mpro (Central Pacific Homeloans) over 11 years ago
Bruce - Thank you for keeping everyone up to date with your posts also.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
Amen, so very true.  everyone thinks they should wait a while and see what the market will do.  To late.  Mortgages are harder to get now a days.
Posted by Provadus Home Loans, Technology bringing you home. (Provadus Home Loans) over 11 years ago
Good post!  I just posted the rates on my blog showing the jumbo's going up, but the conventional loans are going down!  GREAT time to buy or sell like you said!
Posted by Pete C, Hawaii Mortgage Loan and Refinance (TBA) over 11 years ago

Erik - They may get even harder.  Waiting is not a good plan.

Pete - Thanks for the update on the rates.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
WooHoo!  We need to get real, get serious and get on the ball!
Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) over 11 years ago
Sally - The pros like you will become even more valuable to your clients as the market gets tougher to navigate through.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
Getting real is important in today's world - great information for those on the fence
Posted by Thesa Chambers, Principal Broker - Licensed in Oregon (Fred Real Estate Group) over 11 years ago

Randy, it is getting tougher but 100% financing is still doable.  Stated is getting tougher also, but those that know what they are doing can still get them done.

You are right about working with a professional, someone who knows the rules and stays on top of things.  If you do not then be ready for last minute surprises, including not closing when you are suppose to. 

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 11 years ago

Thesa - I have a couple of buyers who will lose out if they don't move soon.

George - It is definitely time to stick with the pros.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago

$625K for a jumbo?  Wow!  What's the average sale in your county?

Posted by Jeff R. Geoghan, REALTOR, Marketing Manager (Coldwell Banker Residential Brokerage) over 11 years ago

Randy.... people do need to be more aware of their financing options. And as you stated, to get with a mortgage professional who understands all of this and who can not only educate them, but knows what they are doing.

In regards to FHA, it's not actually 3% down, but 3% out of their pocket. A total of 6% seller help if needed to cover additional closing costs.

jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) over 11 years ago

Jeff G - In June the median price on Oahu was $685,000.

Jeff - I was just talking down.  I did mention that closing costs were additional and they do vary from place to place.  Good point, the seller can help with the closing costs, but not the 3% down.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
Randy.... no problem, I was just trying to clarify.  thanks
Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) over 11 years ago
Jeff B. - Mahalo (Thank you in Hawaiian)
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago

Randy,

The days of 100% financing are over. It is even hard enough to get a regular loan without all the bells and whistles. I just received an offer and the loan is 20% down...but they think they can close in 2 weeks. If they can I told the Realtor(R) I will buy them dinner wherever they want.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (eXp Realty) over 11 years ago

Randy,

Good advice.  Of course folks should ALWAYS go with a pro.

Current conditions just render that truism even more importance.

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) over 11 years ago

Nothing has changed to 100% financing for full doc borrowers. I repeat, NOTHING has changed.

Low documentation loans are non-existant right now. What they will look like when they come back? WHo knows!!! 10% down minimums is my guess.

But 100% is very alive.

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) over 11 years ago

Neal - 2 week closing.  I have seen one of them with financing in the last three years.  Fat chance today.

Mike - The bad agents are getting worse as they get deperate.

Tom - The last 20 or so loan officers I spoke to and all the industry reports are all saying that 100% financing is going away or at least will be real tough.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago
Thank you very much for sharing, very good advice...my old company just went under, hard to believe Charter would just close down when FMFC is a conventional A lender...who knows how many more companies will cease to exist?
Posted by Shane Sarae over 11 years ago
Shane - I was surprised to see Charter go under.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 11 years ago

This blog does not allow anonymous comments