While you might think that listing a home and getting a good offer is the toughest part of our Lake Norman real estate market these days, in my opinion you would be wrong. The greatest challenge in most cases right now truly is getting a lender to actally make a loan and close a sale!
We all know that banks and mortgage institutions are having their own tough times. However, the current home loan market is so challenging that it is impeding any progress we might be able to make in the process of restoring our Lake Norman housing market's stability.
The problem is that we have gone from having mortgages that were too easy to get to an irrational system that makes it nearly impossible to get a loan! Just ask anyone who has tried to get a "Jumbo Loan" lately. Jumbo loans are loans above the $417,000 ceiling set by Freddie and Fannie. Right now they are more expensive (1% or more higher interest rates) and much harder to get. This in part explains the significant slowdown of Lake Norman area home sales above $400,000.
Probably the single greatest challenge I have experienced lately is with appraisals and it is going to get worse starting this Friday May 1st (2009) when all banks are going to have to use management companies to choose the appraisers. Not only will lenders and brokers not have any contact with these appraisers, but there is no guarantee that the appraisers will even be well versed in the neighborhoods in which they are doing the appraisals.
Even before this, it has not been uncommon for the appraisal to come in at the purchase price just to have the underwriter throw out the appraisal and order a field appraisal which is less likely to take into consideration special qualities and amenities that make a property more valuable.
I guess what I find most frustrating is that a person's home and property's value in many cases is being determined by automated computer programs which don't allow for considerations for so many qualities that add to it's value to a home buyer.
The Good News:
USDA Rural Housing Program loans are available in much of our Mooresville and Lake Norman area. These loans can be 100% financing with no mortgage insurance and no money down much like a VA Mortgage. See the USDA Rural Loans website or call your loan officer to find out if the home you are selling or buying qualifies. On April 20, 2009 they increased their income structure for 1-4 person household to $70,750.
Other helpful websites:
United State Departement of Housing and Urban Development (HUD)
Hope Now (Foreclosure prevention assistance/counselors)
It is not impossible to get a good loan and close a sale these days. But, it is a lot more challenging!
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