San Diego Home Mortgage : Hope for San Diego Short Sale Buyers and Sellers.
For the past 2 years I have had many pre-approved clients that more than qualify for a San Diego home mortgage that have either settled for their “second choice” home or have pulled out of the market to wait for more inventory. The main reason that they are passing on homes that they really want, can qualify for and are listed for sale is that they are short sales. While I do work with a few agents that have a 100% track record on getting their short sale listings approved and sold, the Sandicor (San Diego MLS) numbers show that on a county average only between 45 and 50 percent of short sale listings end in a closed escrow. In many of these, the ones that do close take between 4 and 9 months to close. This can be a big problem on the financing side of the transaction because credit approvals for a San Diego home mortgage are only good for a period of 90 days and a new approval with new documentation and a credit pull is required after that point. The short sale market and San Diego housing market might be in for a change for the better because the Obama administration has just announced new universal short sale guidelines. These new guidelines for investors (banks and mortgage company’s) should help San Diego home mortgage applicants that are looking to buy real estate in San Diego in a few different ways and a higher percentage of short sales should be closing and closing faster.
While speaking at the annual Mortgage Bankers Association that was held in San Diego a few weeks ago, Lori Maggino from The Treasury Departments Office of Home Ownership and Preservation said that they haven’t reinvented the wheel, but their goal is to cut down on paperwork and to standardize forms. By creating an industry standard they hope to eliminate the time consuming back and forth negotiations between the Realtor and the investor. That negotiation is the part of the short sale transaction that can take the better part of a year. Hopefully when these changes and guidelines come out, we will see more movement in the “pending” inventory of homes on the market and more San Diego home buyers will actually be able to buy the homes that they have offers in on. I will update the blog as more information and implementation is available.
Last Friday The Department of Housing and Urban Development (HUD) had a news release that will impact the San Diego mortgage process quite a bit. HUD controls the Federal Housing Administration (FHA) insured mortgage programs that have seen a huge increase in popularity since the “mortgage meltdown”. Fridays press release gave reference to plans to implement a set of new credit policy changes that will strengthen the agency’s risk management. Rumors have been going around that FHA has dropped below the capital reserve ratio of 2% mandated by congress. They have also announced that a new position of Chief Risk Officer will be created for the first time in FHA’s 75 year history.
Most first time home buyers are using FHA programs for their San Diego mortgage since they allow up to 96.5% financing so the stability and survival of the program is extremely important. These changes take effect January 1st 2010 and have an effect on who can originate FHA loans, the appraisal process and reserve requirements for lenders that originate FHA mortgage loans. This news seems to be very positive for consumers and hopefully for the San Diego housing market as a whole.
To see the press release CLICK HERE.
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When looking for a San Diego home mortgage, good credit is more than worth the effort it takes to both achieve and preserve. If you have good credit, I hope these tips will help you push your scores even higher. If you have less than perfect credit, now is the time to start rebuilding it so that you can qualify for the right San Diego home mortgage. If you are planning on buying a home in the next 6 to 12 months you cannot afford to make these mistakes!
Do not get behind on any existing accounts. Just one 30 day late payment will drop your credit score 25 to 75 points. If you miss a mortgage payment you may be disqualified from getting a new San Diego home mortgage completely.
Do not pay old collections, charge offs or medical bills. I know that this one sounds crazy but paying on old collection account will immediately make your FICO score drop. You should not pay off old accounts before or during your escrow unless the underwriter for your new San Diego home mortgage is the one instructing you to do so.
Do not close credit card accounts. In the past BEFORE the FICO score model some banks and lenders would want you to close accounts because if you had access to the credit the assumption was that you would use it. Now when you close a credit card account it will make your credit score drop on the next bureau update. A big part of the credit scoring model is how much debt compared to the amount of your available credit. On your revolving accounts you should be sure to keep your balances low. Having balances under 35% will give you the maximum credit scoring results. For this reason you don’t want to consolidate your credit card balances onto one or 2 cards. The length of your credit history is also very important. So if you have to close an account make sure it is a newer one.
A question that I get all the time is, “How fast can my score go up 100 points?” ,unfortunately the only way that the credit score moves fast is DOWN. When you are trying to get a San Diego home mortgage doing NOTHING is better than doing anything fast. The FICO system and credit scoring model is set up to reward stability. If you start changing things around (especially doing the wrong things) and your credit usage habits change drastically, it will almost always make your credit score drop.
If you have any credit or San Diego home mortgage questions or would like a copy of our Credit Scoring booklet give me a call at (619)285-2921 today.
It is estimated by the Federal Trade Commission that as many as 9 million people in America fall victim to identity theft every year. Unfortunately too many people have no idea that they have been victimized until they are applying for their San Diego home mortgage.
Identity theft happens when information such as credit card numbers or social security numbers are used to make purchases, open credit cards or other accounts in your name.
Do Annual Credit Check-Ups!
Visit www.annualcreditreport.com to get a free credit report once a year. Closely review all 3 credit reports and look for anything suspicious or unusual. Look for unusual addresses or inquiries that were done without your knowledge. You should do this once a year so there are no credit surprises when you try to qualify for a San Diego home mortgage.
Opt Out of Special Offers!
Go to www.optoutprescreen.com to cut down on all of the pre-approved credit card offers that come in the mail. Many identity thieves do things the low tech way, by stealing mail. They do this by getting it from a mail box or going through your trash. Make sure to shred all documents that contain ANY personal information before you throw it away or recycle it.
Do Not Give People You Don’t Know Your Information!
Avoid falling prey to phishing scams either over the phone or by e-mail. Phishing scams done by identity thieves that pretend to be someone from your bank or another credit institution and ask you for your personal information. If someone contacts you requesting your personal information, do not give it to them. Any company that you have a bank account or other credit account with already has your information! Find out the name, phone number and employee number of anyone asking for your information and tell them that you will call back. After hanging up the phone, call the number on your account statement. NOT the one that the person gave you to see what the issue with the creditor is, if anything. This is all basic common sense; if you don’t shred your personal information before discarding it, anyone can go through your mail or trash to find out where you bank and your phone number. They can then call you and say that they work for your bank and they had a few “quick questions” after you verify your identity. If they are a smart trash digging identity thief, they can go into your bank and look at a few name tags and say, “I work at the branch up the street with Tim and Suzy” to make them sound more credible and make you feel comfortable about giving up the information. Take the extra time to call the bank back or even better go down in person.
Do Not Click On Links in E-mail Messages from Financial Institutions!
This is the high tech way to get you to give your information. It is very easy to recreate the look of a company’s email or web page. If you click on one of these links it can take you to a web page that looks like the sign in page of your financial institution. After trying to sign in, the identity thieves will have both your login and password. It is much safer to go directly to the website of your bank or credit card company to access the information that you want. Often fake sites will have unusual graphics, color schemes, or misspelled words. These are signs that someone is trying to “Pharm” your information.
Identity theft costs the average victim around $5,000 and hundreds of hours of time trying to fix the damage done to their credit. Legitimate credit cards may raise your rates and even worse, you might not be able to buy that new car or qualify for a mortgage for your new home.
If you would like a copy of our credit scoring booklet or would like more tips on how to avoid credit theft, call me at (619)285-2921.
I am pleased to announce another high loan to value program that is helping more people buy San Diego homes. The Fannie Mae HomePath™ program can be used to buy foreclosed homes and condos owned by Fannie Mae. There are a few unique things about this San Diego mortgage program that no other program offers. First the new loan will not have any mortgage insurance. Even at the 97% financing level. There is no appraisal needed on the property since the sale price is considered an accepted value of the property. The best part is that there is a minimum of only 3% down on owner occupied properties and investment properties can be purchased with only 10% down. HomePath™ is a program that was made by Fannie Mae for them to be able to sell properties quickly that are already serviced and guaranteed by them. It was designed to minimize the impact of foreclosed properties on a community. The buyer of these San Diego properties is even allowed to have the 3% gifted or loaned to them for the down payment needed to buy the home. The borrower for this San Diego mortgage program must have at least a 620 credit score and the loan must be full documentation. The mortgage can be used on a condo, single family home, a planned unit development (PUD) or on multi unit properties. Second homes and investment properties can be bought with as little as 10% down; so these properties have a tendency to sell quickly.
There are only a few San Diego mortgage lenders approved as HomePath™ lenders. For more information call me at (619)285-2921 or fill out the contact form for us to give you a call.
If you are a Realtor® that would like to find out more information about being approved as a HomePath listing agent or would like some marketing material about the program you can click here for more information from Fannie Mae.
In the past few years the lending industry has lost many programs that were important tools for helping people buy and refinance homes. One of the most used and abused San Diego mortgage programs and a major cause of the “mortgage meltdown” and housing crisis was the stated income loan. While the major banks main concerns these days these days seem to be trying to pass government stress tests and spending TARP dollars, a few small wholesale lenders have introduced stated income San Diego mortgage programs again. The last time this type of mortgage program was available, 100% financing with stated income could be used for purchase or refinance with unlimited cash out and there was a lot of abuse. This time around there are a few more guidelines to hopefully slow the abuse of the program while letting responsible people use this tool effectively. The applicant must now have at least a 660 FICO score and no mortgage late payments in the last 24 months. The loan can be used to purchase or refinance (with no cash out) an owner occupied residence. The property can be a single family or up to 4 units as long as the buyer plans to live in one of the units (sorry no condos) . This San Diego mortgage can only be used for a loan amount of up to $417,000 and the maximum loan to value is 80%. The borrower must be a w2 employee which makes NO sense at all since it is self employed people that usually have a hard time proving their income but hopefully this will change in the near future. This is a true stated income program with no 4506T required so there will not be any request for IRS transcripts. This program can and will help many people be able to get loans that otherwise would not be able to buy or refinance their homes.
For more information on this or any other San Diego mortgage program give me a call at (619)285-2921 today .
In a recent survey over half of potential home buyers said that they are still not ready to jump into the Real Estate market due to the fear of losing their jobs.
Fortunately for San Diego first time home buyers there is a program that will help pay for a San Diego mortgage loan in case of job loss, disability or accidental death. In April the California Association of Realtors® launched a mortgage protection plan. The C.A.R. Housing Affordability Fund Mortgage Protection Program for First Time Home Buyers ( a shorter name would have been nice) will give up to $1500 per month, for 6 months to help make your San Diego mortgage loan payments. A qualified co-borrower on the San Diego mortgage loan can also receive a monthly benefit of up to $750 dollars per month for 6 months.
This program is FREE to first time San Diego home buyers and comes in the form of a mortgage insurance policy that is prepaid for one year. by C.A.R. to help make payments on your San Diego mortgage loan.
To qualify for this mortgage protection plan an applicant must:
- Be a first time home buyer that has not owned a property in the past 3 years.
- The escrow must be both opened and closed between April 2, 2009 and December 31, 2009.
- Purchase a primary residence in California.
- Be represented by a California Realtor®.
- Be a W2 employee (not self employed) but can be a sole proprietor, partner or controlling stockholder in the business in which you are employed.
This San Diego mortgage loan protection plan has NO income or home price caps.
For more information give us a call at (619)285-2921 or contact your Realtor®
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