Special offer

Zoom Call 5.09.23 William Piotrowski What Types of Mortgages are Currently Popular

By
Real Estate Agent with Mapleridge Realty, CT 203-206-0754 REB.0759001

William Piotrowski What Types of Mortgages are Currently Popular

The Zoom call this week was presented by William Piotrowski a  Branch Manager and loan officer for Diamond Residential Mortgage.  As such, with the coverage his company enjoys, he offered up information on the state of loans in the current market.

FHA loans are a popular product, at least through the first quarter of the new year enjoying a jump from 8.4% to 11.7%. This represented the largest increase in loans since 2007. While it is still lower than people would like to see it still represents a significant appreciation. Sellers seem to be loosening their reluctance to allow for an FHA appraisal and his caution was for agents to be cognizant of what would flag an issue and work to get a solution to allow the mortgage to flow.

Peeling paint is a major negative, as well as a questionable roof, and carbon and smoke detectors. Inspectors have also been known to take issues with neglected windows. Cracked panes, missing caulk take the habitability away from a home.

William Piotrowski What Types of Mortgages are Currently PopularConventional loans still lead the types of mortgages being sought at 76.1%, followed by FHA and then there's cash accounting for 8.3% of all purchases in the first quarter.

Different regions of the country see this as a different trend. 

Credit scores will always impact loans, and even though Federally funded loans are designed to help lower income people, there are safeties, called overlays in place. as a safeguard. A loan on a credit score of 500 is possible, but the borrower still needs to have good spending habits.

Advantages with an FHA Mortgage.

Aside from the allowances for lower credit scores, an FHA loan has other advantages.

A borrower can apply for an FHA loan 2 years after bankruptcy while conventional requires 4 years.

After foreclosure, it is a 3 year wait for an FHA loan against 7 years for conventional.

It is upon a buyer to offer full disclosure as to their credit history to their loan officer in order to better ascertain the type of loan they might be able to get.

A borrower can qualify for an FHA loan with as little as 3.5% for down payment. Conventional requires much larger.

FHA loans offer flexibility with gift funds. An employer can offer a gift letter as well as primary family members. It is understood that a gift letter does not have an expectation of repayment.

FHA mortgage insurance is a declining value over the life of the loan until a value of 78% equity has been achieved.

Debt ratios offer greater impact. FHA loans offer slightly better flexibility with debt ratios than conventional which is usually at 41% and FHA offers slightly better flexibility.

FHA allows for an assumable mortgage if the buyers have the means to repay the equity owed the seller. As an example, it was offered that one of the callers bought their current home some time back and it was an assumable mortgage. The seller had not owned the home long, and against a purchase price of $57,000 and an outstanding mortgage of $50,000 so the person needed to pay back $7,000, as well as demonstrating the ability to repay the loan.

There was some discussion on the frustration of buyers with the lack of inventory. Cash buyers' rule, however, and with the limitation of homes, highest and best will always succeed and this is not a trend that will soften any time soon.

Buyers are being forced to look at different locations; a different style of house, seeking less features with the hope that it can be upgraded in the future.

The lack of inventory is having an impact not only on buyers but also on the people trying to service the industry. William offered a statistic that over 600,000 people will leave the real estate business this year. In addition to agents, it would be inspectors, loan officers, photographers, title people, stagers, etc.

It was a full call with many questions being answered or discussed. It was apparent that the industry is entirely local and what may be happening in one part of the country is different in another.

William Piotrowski What Types of Mortgages are Currently Popular

Posted by

 

Edward (Ed) Silva
Broker Associate

Serving Central Connecticut Sellers and Buyers

My Blog
Email Me
EdSilvaCTrealestate.com


C:  203-206-0754
Call or Text

O:  203-758-6440

 

Do you know anyone who is behind on their mortgage and doesn't know what to do? I may be able to help them. I am an experienced Short Sale Broker

Short Sales in Connecticut

 

Search all active Connecticut listings

 

 

Comments (11)

Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Ed,  I should of caught this one on Tuesday but had a Dr. appointment at one.  Thanks for the recap.

 

May 11, 2023 08:42 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Ed, was at a lunch, so missed this important Zoom meeting, but thanks for the recap.

May 11, 2023 09:10 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

William was well prepared with plenty of supporting information.

May 11, 2023 11:22 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Excellent recap, Ed... no doubt about it... once sales are down due to lack of inventory, the impact snowballs down the line to many people who provide ancillary services.

May 11, 2023 11:45 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Ed:

Sounds like William was a wealth of helpful information in his presentation. I'm sorry to have missed it, but this was a big help that hopefully others will read.

Jeff

May 11, 2023 01:35 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Ed it was a lively meeting with good information and lots of discussion.

May 11, 2023 02:13 PM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Ed Silva  So sorry is missed this meeting sounds like it was jammed pack with loads of interesting information. I had one appointment done early and was ready to Zoom but my Wednesday appointment was rescheduled for Tuesday as he was being called out of town. Thank You for this great re-cap 

May 11, 2023 02:42 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Ed- we had another good Zoom meeting thanks to William Piotrowski He brings a lot of energy as well as good information to his presentation. 

May 11, 2023 05:08 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

I missed the first few minutes but took a few notes from the time I was there. Great overview as always!

May 12, 2023 04:42 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

You do such a great job with your recaps!  I am glad that you attend the meetings and then share your notes with us!

May 12, 2023 05:04 AM
Edward Gilmartin
CRE - Boston, MA

FHA loans biggest surge in popularity since 2007. Is that a contrary indicator

May 12, 2023 02:46 PM