There are no easy loans these days. At least in my market, there are only 4 ways a buyer can purchase a property:
- CASH
- 20% down AND excellent credit - 750 range
- FHA which has a maximum loan amount of $375,000
- USDA Rural Housing which has income limits
For those in the mortgage business that are reading this, don't write and tell me about other solutions; these are the real options.
Even if the client should qualify for an FHA loan or USDA Rural Housing loan, you need to make sure that the buyer is working with a loan officer and a mortgage company that actually knows how to get that loan approved.
A well known name and a loan officer with "25+ years in the business" is not necessarily a good sign. The requirements of a USDA Rural Housing loan are cumbersome and the paperwork has to be in order and perfect.
When the buyer agent tells you that "everything is going great and we're on track" even if you have received a loan commitment, be very wary. Up until the night before settlement, I saw no reason to doubt the buyer's agent, much longer in the business than me, or the mortgage company, one of the big names in the news that is touted as a "good guy" and a survivor, even a good investment.
What I have learned is that neither had a clue about how to do it right. While the buyer's agent was playing golf, I was getting calls from the Underwriters at the buyer's mortgage company asking my help in finding a way to get the funding approved! I represent the seller!
I don't know how this story is going to end, but I know one thing - the next time I see that a Buyer is using this particular loan officer, I will ask for a final loan commitment before presenting the offer to my client. Anyone can do the easy loans, but only a select few really take the time and care enough to do what needs to be done today.
If I wrote about the whole story, this would be the longest blog in AR history. Here's a tip - if you have a condo listing and a buyer needs to go either FHA or USDA Rural Housing for financing, the first step is to make sure the Loan Officer gets an FHA SPOT APPROVAL. USDA follows FHA guidelines and processing will take longer than a conventional mortgage.
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