REAL ESTATE TRANSACTIONS FALLING APART
Joe Petrowsky in Connecticut wrote this great blog about how he saved multiple transactions when other lenders were going to let them fall apart. Having the right lender who knows what he/she is doing and the different loan products, and how they fit with specific purchases is essential right now. This is also a great example of why you really, REALLY, need a local lender. Never talk to just one lender - they all have different ways of doing things right now!
“Real Estate Transactions Falling Apart”
Last month, I got a panicked call from a Realtor I met a few months ago, through my blogging on Activerain. Even though we were in the same state, I had never met her before. She said she was involved with a transaction that involved 3 sales, as part of the chain and 2 of the transactions were having mortgage financing issues. The two transactions with the issue were in New York. She asked me if I could help out. “I love these challenges”.
It turned out, the problem with the first transaction was the wrong type of mortgage. The buyer was purchasing a home that needed repairs. The mortgage company was from Texas and didn’t offer the correct mortgage product. They were attempting to do a conventional mortgage, but it should have been an FHA 203K. The appraisal that was originally done, killed the transaction.
The sellers were purchasing a home in the next town. They had gone to a local credit union for a mortgage. The issue was they had recently been late on a mortgage payment and their credit scores had dropped, so their lender wasn’t willing to do the mortgage for them.
I told the Realtor that both NY loans were doable, but it would take a minimum of 6 weeks to get the loans done. So she had the communicate the information to her seller in Tolland, Ct. After discussion with the sellers, they said they would wait and the purchase agreement was redone, to make the dates work.
OK, so this is how it all came together. I took an FHA 203K application from the folks to buy the 1st house. I had them get a contract for the repairs ($16,000), completed the application and had the appraisal done. All went very well with this transaction.
The second transaction was not as easy. Because there was a late mortgage payment in their history, this loan had to be done as an FHA loan, even though they were outing 20% down. Even though, they were putting 20%, doing a 30 year mortgage would require monthly mortgage insurance. In their case $142 per month. Here is the positive side, the interest rate would be 3.875%. If we were doing this as a conventional loan, the rate would be 4.5%, as a result of the lower credit scores and late mortgage payment. The difference in payment ended up being $39 higher, not that bad.
Both NY transactions closed and the following day, the Tolland, CT transaction closed. I love what I do for a living. It allows me to make a difference in people’s lives and get paid at the same time. Who could ask for more.
We are licensed in CT, MA, RI, VT, NH, ME, NY & FL. If I can assist you with any transaction, let me know. joe@righttracfg.com
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x16
Fax: 860 647-8940
Cell: 860 836-9294
Email: joe@righttracfg.com
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