Home : Blogs : Paula Roberts : Paula's Blog

Financing Today

I realize we are in a market that is changing daily. Today I was on the phone with a lender here locally who told me that she was having a very difficult time right now getting customers Conventional financing. She said most of her customers were going FHA or other alternative financing. This confuses me! I wonder what other agents are experiencing? I have a customer coming into my office tomorrow and I find it hard to believe that Conventional financing is tougher than FHA. My own past experience was just the opposite. She made the statement that Conventional financing was quickly becoming a thing of the past???? Where are we in this whole finance mess???? Better yet where are our customers?

Posted by Paula Roberts on 04/14/2008 11:34 AM

Comments (6)

mortgage, real estate, lenders, banks, conventional, fha, lending, market

This post has been included in Georgia Information

6 Comments on Financing Today

I am a lender, and with conventional they are being so much stricter now than ever before. Like they are being too strict andkilling the market. FHA is easier now, as we the appraisal is so much like a conventional appraisal and fha does not see a declining market. The cosmetice issues of the past are gone.

04/14/2008 11:40 AM

by Indigo Financial Group

Hi Paula!

My answer to you is it depends. FHA is going to be the future as far as I can see it in my town. It is perfect for the FTHB or someone with poor credit and little down. Conventional financing has been difficult. Here in California we get dinged for being in a declining market and they typically shave 5% of the loan to value requirements (meaning more down payment required). Credit is becoming more important than ever. With FHA you can go down to a 580 score (unheard of with conventional financing these days). There is also a 203k program (although it can be a pain), offers stellar rates for a rehab loan. With FHA (utilizing Down Payment Assistance Programs) you can get a borrower in with no money down. Their rate on the entire loan amount is around 5.5% these days. No way you could touch that with conventional.

04/14/2008 11:47 AM

by Team Newington (First Priority Financial)

Paula - I am not a mortgage broker, but many of our customers can't do conventional anymore with the amount they are requiring down and are having to go FHA.

04/14/2008 11:52 AM

by Solaris Realty

Aside from the restricted closing costs a buyer could not pay, thus pushing them off onto an unsuspecting seller, and the appraisal conditions an FHA loan came with FHA has always been easier for the borrower to qualify for. However, those days are gone. The buyer can now pay all customary cost and the notorious conditions have been reduced to health and safety; same as conventional.

The problem with conventional today is the mid-night vanishing programs and program changes. Credit score 620 was once the floor for conforming, sub-prime and alt-a stepping in below. Alt-a and sub are all but gone. The floor is now 640 with 680-700 being the floor for best rates.

Things have returned to the 80's early 90's. A customer actually almost really has to be able to pay for the house to get the loan.

Lance

04/14/2008 11:53 AM

by Lance Holtman

I understand everything you guys are telling me but, correct me if I'm wrong. I thought there was some type of rule with FHA financing that a customer can only finance one time using FHA. Is that correct? If that is the case then what would you do with the customer who bought their first home FHA. Then their second home was financed conventional and they decided to sell and buy again?

04/14/2008 04:51 PM

by Paula Roberts (Century21 Belk)

They will need to refi out of the FHA loan in order to qualify again...or sell the home. Sorry:)

04/14/2008 05:37 PM

by Team Newington (First Priority Financial)

Leave a response…

Name:

Notify me of new comments:

Comment:

What does the graphic say?