Ah the approval letter finally came on the fax machine at 6:57 p.m. last night. But it wasn't easy. Most of my contracts are for second homes. I work primary on a recreational lake and about 70% of the homes I sell every year are not for someone to live in, but as weekend get-a-ways. You'd think that would mean my clients (my buyer clients) would be easily getting loans, but it seems the rules are changing faster than I can type.
The next closing I have scheduled is one of those second homes. The loan officer told the clients that they could purchase with 10% down. Just before the package went to underwriting the loan officer called me to say that the buyers would have to put 15% down as the rules had changed. Of course I was a bit freaked out. She called me back shortly to let me know she had talked with the buyers and while they weren't thrilled about the change, they had the funds and would proceed with the purchase.
Well when underwriting approvedeverything they started looking for a PMI company to insure the 5%. Now the sales price is (these are not the actual numbers, but an example) $100,000. The down payment would be $15,000. and the insured amount would be $5,000. Guess what??? no takers. That's right no one would insure the $5,000. Are you kidding me the house appraised for $34,000. more than the purchase price. SO REALLY ARE YOU KIDDING ME? Does this really look like a bad risk to you??
So the next phone call the lender made to the buyers asking for another $5,000. By this time I'm nearly throwing up. Turns out the buyers do have the additional funds and plan to go ahead with the purchase. I'm thrilled and so are my sellers. But really are you kidding me???
So when I heard on the news again that the government was going to put pressure on the banks to lend lend lend I think two things:
1. Isn't that what go us in trouble in the first place? and
2. Even if you have an investor to take the loan if you don't have 20% down and let's face it most buyers don't these days, isn't it really up the the PMI companies if the loan gets approved?
So where does that leave us?
So I'm thankful that my current buyers are getting a great deal on their new lake home and I'm thankful they had the funds to close.
706-485-9668
Tammy Lankford, Broker/Owner
Call me today for all your Lake Sinclair real estate needs.
We always have water at lake sinclair
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