I was having lunch with a commercial lender last week who said, "It must be tough in the single family residential business with the maximum loan limited to 80%" I was surprised and let him know that we are making 95% Conventional Loans, 97% FHA Loans and even 100% Loans through VA and Rural Development Programs. He was then surprised.
I took one of my top Realtors fishing earlier in the month who said, between casts, "I heard that a customer has to have a 680 credit score to even have a chance at mortgage financing." Not true. We made a loan this week to a customer with a score of 589!
I recently met with a builder who is concerned about credit getting tight. I can't argue with that. Credit requirements have tightened but money is still available. He said that the 20% Down Payment, Construction to Perm requirements are not helping sell houses. I told him that we offer a 95%, One Time Close, Construction to Perm! He looked at me like I was from another planet.
While we in the mortgage industry are working to spread the truth about ever changing market conditions, the "talking heads" on CNN, CNBC, etc. can throw out an erroneous blip of information that is taken as gospel. Bad news is easy to spread and even easier to believe in these trying times. My suggestion? Get the facts and stay away from the negative. It's like my mother used to say, "You get like who you run with." I'm making an effort to "run with" positive professionals and clients.
Money is available. Money will be made more available as the weeks pass with the government working to free up credit. Is it bad? Sure it is. Is it going to get better? It always does. 30 Year rates are in the low 6% range! Does anyone remember 12% - 14%? There is light at the end of the tunnel. Our job as Real Estate Professionals is to view it as sunshine and not an oncoming train! Be positive, it feels better.
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