An insightful look at lending in the Steamboat Springs market provided by Kathryn Pedersen of Yampa Valley Bank:
First and foremost, lenders are still making loans. We had a record month in June and expect another great month in July. As a local bank we are still lending on vacant land and doing construction loans. In the mortgage department, a good portion of the homebuyers that we are seeing today are first time homebuyers. The $8,000 tax credit is working in our eyes. Remember, the tax credit is for qualified first time homebuyers that purchase a primary residence, and close by December 1, 2009. (Please consult your tax advisor for specific questions on your situation.) We expect lenders to get very busy as the deadline approaches, so it is important to get under contract by the beginning of October to take advantage of the tax credit.
Lenders are protecting their investment and they want to be absolutely positive that they have accurate information. This means that you will most likely have to submit tax returns, paycheck stubs, asset statements and other items with your loan application. In addition, lenders will also pull your tax return transcripts from the IRS to be sure that your reported income matches the application income. It is more important than ever to be upfront with your lender about any oddities of your income or write offs.
Rates have been through a wild ride. In the past it would be surprising to see our rates change an eighth of a percentage point in a week, now we may see a quarter to half percent change in a day. This makes working with someone with their finger on the trigger more important than ever. Just an eighth difference in rate can change the affordability of your payment.
Another flash back to the past is an increase in government loans including FHA, VA and USDA. These loans lost popularity with the rise of the subprime products, but they are making a comeback. Each product has its own advantages and disadvantages and they offer programs with lower down payments and flexible credit guidelines.
It is a great time to buy. There are great programs, rates and loans are available. However, it is more important than ever to surround yourself with professionals that understand this changing lending and real estate market.
Kathryn Pedersen is a VP and Mortgage Officer at Yampa Valley Bank. You can reach her at 970-875-1609 or kpedersen@yampavalleybank.com.
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