Jason's Blog

5 Programs for 100% Financing and Beyond

2008-06-09T15:08:52Z

Gone are the days of 80/20's and and 100% financing, or are they?

With the changes in the mortgage markets we must adapt and expand our product offerings for our clients and re-educate buyers on what their options are. Most of us know about FHA and VA, but there are other options. Here is a list of 5 programs that we have been using for low down payment borrowers.

FHA: 100% financing using a non-profit down payment assistance program or community second. Upfront MI premium plus monthly MI payments
VA: For veterans with VA elibility offering 100% financing with no MI, however a VA funding fee may apply to some applicants
Debt Eliminator: Also for veterans with VA eligibility providing 100% financing with no MI and allows the seller to payoff the buyer's existing debt of up to 4% of the sales price
Affordable Combination: First and second combo that provides 105% financing for the purchase price plus closing costs and prepaid expenses. MI can be paid monthly, single premium, split premium or lender paid.
Rural Housing: 100% financing in designated rural development areas with no MI

There are also programs like My Community and Flex 97 which allow 100% financing in conjunction with a community second. These seconds are available from the local municipalities and are typically readily available. Check with your local municipalities for availibility.

All of these programs offer competitive rates and attractive financing options for anyone even thinking about purchasing a new home with little or no money down. If there are any questions regarding these programs please feel free to contact me for more information.

Buyers seeking real estate or a home?

2008-06-05T16:11:26Z

We have seen a lot of information circulating about the state of our real estate market and the mindset of lenders. Most of the news has been negative, which creates a fearful homebuyer and homeowner. The reality is that there are still many viable options to purchase a home a great price with little to no money out of pocket in the Puget Sound area. Interest rates are still at historic lows and money is readily available to borrowers who have decent credit and can document income & assets.

We are fortunate in the Puget Sound area of Washington State to have a relatively strong economy and stable real estate market at the moment. It appears that we have entered a state of normalcy compared to the unrealistic and frantic pace we kept up for the past several years. This deceleration has caused some panic and fear among real estate professionals, home owners, and potential buyers. As buyers fear that housing prices will continue to fall, they wait on the sidelines in search of a better deal. This creates a self-fulfilling prophecy where prices drop because buyers are holding out for lower prices. As real estate professionals it is our duty to help re-educate the general public and separate the facts from fallacy.

How many 100% financing programs are still available? The answer is several programs are available that offer attractive terms with 100% financing on a purchase and a refinance. One problem we face is that many buyers and current owners don't know these programs are available to them. They have no idea of their current real estate options. It is easy for the average consumer to get lost in the massive amount of information presented to us on a daily basis.

It becomes important to promote the value in owning a home and focus on the long term. Real estate has always been a solid long term investment. Therefore the value proposition is that a buyer can get into a home today at a great price with the right payments and still come out ahead. They will have the opportunity to live in a home where they and their family can live and grow, while securing a long term investment placing money in their pocket some years down the road. What they have to realize is that even if we have prices decline, they will still have a home to live in and are putting money in their pocket instead of someone else's. We have gotten away from real estate being a home and instead view it as an ATM. Real estate does not generate fast money, but a secure long term investment in our community and our family.

Dognapper in Puyallup WA

2008-04-24T18:43:31Z

This may not have anything to do with real estate, but I find it important to spread the word to others in the area. Especially since so many of us have a large network and are constantly working in the community visiting home sites and driving neighborhoods. This particularly applies to the Puyallup area in Pierce County Washington.

I received an email this morning from a friend and a breeder of Dogue de Bordeauxs (French Mastiff, aka the dog from the movie Turner and Hooch) that was somewhat troubling. Her dog had been taken from their backyard after being outside for 10-15 minutes. The dog's name is Cyrus and he has won many awards and championships. He is retired now and his owners would just like to have him back. Here is a link to his pictures: http://www.evergreenbordeaux.com/cyrus.htm

The police and animal control believe that who ever took him was really looking to take their puppy, however were only able to get away with Cyrus. They believe that he will be dropped off somewhere and that keeping an eye out would be our best bet. For those in the know, their home is located in the Puyallup Valley and expect to find him in the surrounding area.

So if you are in the Puyallup area we would appreciate you keeping an eye out for him and calling the police or animal control if you spot him. He is microchipped and his owners have already searched the animal shelters and notified the police department. Cyrus was wearing his collar and has always been friendly with everyone.

I have two Dogue de Bordeauxs, one from this breeder, and we would just like for him to return home. It is heartbreaking to lose an animal that you care about in this way. Please let me know if you have any information or notify the Puyallup Police Department.

We have been told that often dogs with strong pedigrees are sent out of state for breeding programs. Hopefully this is not the case and we will have Cyrus returned soon. It would be appreciated if everyone could keep an eye out and notify the authorities if he is seen.

Thanks.

Banker, Broker, or Mortgage Banker???

2008-04-14T19:58:30Z

There have been a substantial amount of changes in the mortgage industry over the past year. With the changes it is important to understand the differences among mortgage sources and how those differences impact your real estate transaction. It is my understanding that many real estate professionals do not understand the difference between lenders and I hope to outline the differences here. There are three main types of mortgage professionals: bankers, brokers, and mortgage bankers. I will discuss each briefly to provide a generalized overview of each sector.

Most consumers have established banking relationships and will shop for a mortgage at their local banking branch. Banks provide a lot of security for the borrower, but are subject to strict regulation by the Federal Government since they lend their own capital. The lending process is controled by their in house processing and underwriting which provides good overall turn times and control over the loan file flow. The disadvantage of this route is the lack of loan options and non-competitive rates due to their regulation and conservative approach. Please note that there are some smaller local banks that offer portfolio lending products for mortgages that do not fit into the conventional box (construction loans, short term loans, house boat financing, etc).

A second option that has gained a lot of popularity over the past several years is the Mortgage Broker. Brokers provide a high level of flexibility in mortgage products, provide great product knowledge and have the ability to get the borrower the best rate. Many borrowers use mortgage brokers to find niche products and shop rates for them. Brokers are a great resource in a relatively new area with little regulation. A mortgage broker puts together a client's file and then sends the file to the direct lender. This lender could be two blocks away or 2000 miles away. The downside of this system is that the broker gives away control of the file once it is submitted to the lender. Unlike a bank, the mortgage broker does not necessarily have a net worth. Which means in the event of legal dispute from either the borrower or the direct lender there is little opportunity for recourse.

The third option is one that is growing and provides the benefits of both a bank and a broker. This option is a Mortgage Banker who has the ability to lend their own money and is also regulated by the Federal Government. A mortgage banker must have a net worth of at least $2 million to establish their lending network. This format brings the security and control of a banking environment and combines it with the flexibility and rate shopping ability of a mortgage broker. Some of these mortgage bankers are also portfolio lenders that offer financing similar to the small banks mentioned above.

As our market becomes more sensitive to rates, product changes, and turn times it is of great importantance to understand each mortgage professional and the avenues in which they conduct business. This knowledge allows us to better educate our clients and helps real estate professional to understanding the pros and cons of working each choice.