Gary's Blog

The Sky is Not Falling for Mortgage Financing-Recent Changes Discussed

2008-08-20T19:34:37Z

However, there are lots of changes in the mortgage world that those looking to buy or sell a home should be aware. First, let me say, mortgage underwriting is really based on common sense -does it make sense? Will the buyer be able to afford to make the payments on this house!

For a buyer, it is more important than ever to get pre-approved before going house shopping. For those that can verify their income and have a decent credit score, very little has changed. By a decent score, I mean in the 600 range, although the mid to upper 500s can work in many cases. Borrowers should expect to pay up to 3% of the purchase price towards a down payment for an FHA loan. This 3% can be a gift and come from parents, relatives, etc.

A big misconception is that FHA loans are more complicated and have tighter guidelines. In fact, FHA is one of the most liberal programs especially in the current market. The biggest misconceptions are that you need to be a first time homebuyer, need to make below a certain income level, or must live in a certain neighborhood. All of these are factually incorrect. Right now, for those putting less than 10% down, an FHA loan will most likely be the best option for you. They even allow for a non-occupying co-borrower still!

The biggest actual changes have been with conventional loan products, those typically sold to Fannie Mae and Freddie Mac. Unless someone is seeking a loan amount between $346,250 and $417,000, the changes will not matter in practical term. For those in that range, there will be lots of factors such as credit score, amount of down payment, loan to value, etc that will come into play.

For sellers, it is important to be aware of what may be expected of you by a buyer and by a lender. In most cases, I am seeing buyers requesting that the seller contribute up to 3% of the purchase price towards closing costs and escrow items; this has almost become standard these days, so do anticipate that. Also, sellers need to be prepared to take care of any necessary repairs before the loan closing. In the past, an allowance could be given at closing for the seller to give funds to a vendor of buyer's choice to do repairs post-close. This has not been allowable in this current market, so it is important to realize why the buyer is asking for things to be done in advance rather in than an allowance at closing.

Recovering From Foreclosure

2008-08-20T19:25:28Z

The post-foreclosure requirements have recently changed to qualify for a new mortgage. However, there is life after a foreclosure! FHA loans only require 3 years to have passed unless an exception is granted based on extreme circumstances which vary on a case by case basis. Fannie Mae/Freddie Mac now requires 5 years to have passed with restrictions up to 7 years.

Here is what you can do to be in the best shape to buy another home after a foreclosure.

•· The biggest problem I see is that creditors do not report the data correctly to the credit bureaus. Very often, a creditor will stop reporting any data, whereas, they should be closing the account out, updating the balance to $0 and updating the status. Consumers need to check their credit report regularly and stay on top of creditors to report their data correctly. Credit scores can rise quickly if the creditors are reporting the information correctly! Start looking at your credit report as soon as six months following a foreclosure, and I would recommend checking it every six months.

•· Secondly, re-establishing credit and paying it on time is key. In many cases, you may need to get a pre-paid credit card which allows a credit card company to grow comfortable with you as a borrower. Regardless of how small the minimum payment is, it must be paid on time, this shows an underwriter that you have learned from your mistakes and that you are on a good path. If you are not able to get a credit card, alternative credit can be used such as a cell phone bill, car insurance, utility bill, etc. Make sure these are paid on time as they may be key to obtaining a new mortgage.

•· Lastly, keeping excellent records cannot be stressed enough! Rent should be paid via check or automatic draft. Making a cash payment is like shooting yourself in the foot-even money orders are not the ideal. The clearer the paper trail the better. Also keep all documentation and correspondence from any creditors, especially the lender that foreclosed on your property.

2008 Top Gun Award Recipient

2008-05-07T22:19:06Z

I am proud to share the following.

PRESS RELEASE

Mortgage Loan Originator Gary Parkes of NorStar Mortgage Group was honored on May 5, 2008 as a Top Gun Loan Producer for 2008 by The Georgia Association of Mortgage Brokers. The Top Gun Awards recognize the top 25 loan originators in the state of Georgia. The Georgia Association of Mortgage Brokers is a non-profit organization formed to promote a positive origination and lending environment for mortgage brokers and consumers. The Association provides education, supports legislative initiatives, encourages high standards of professional ethics and integrity from its members, and promotes these principles throughout the community.

Mr. Parkes has been a mortgage originator here in the Woodstock area for almost seven years and handles all areas of real estate finance including residential purchases, refinancing and real estate investments in Georgia, Florida, and Alabama. Mr. Parkes is also a Board Member of the Carmel Elementary PTA and serves as the Chairperson for the Dad's Club. He lives in Woodstock with his wife Stacie, and their two daughters-Abigail and Delilah. He can be reached at 404-936-5601 or at GMParkes@comcast.net.