Getting a Loan is Not Impossible
www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/30/RE8014CT0J.DTL .
I had some good friends over for Thanksgiving. Pretty early in the evening the question came up; “Lee how is the Real Estate Market?” “People can’t get loans? Huh”, he stated. This occurs often. Everyday it is mentioned the “Credit Crunch” we have to loosen up credit. I hope everyone reads “You Can Qualify For a Mortgage, It’s Just Tougher” by Marni Leff Kottle of the S.F. Chronicle,
I went on to tell my friend that I probably will do more transactions this year than last but the average price is down 20%. Home sales are up substantially in San Bruno, Daly City, and South San Francisco with some homes receiving multiple offers. So getting loans is not the biggest problem. Getting people not to believe the newspaper is the biggest problem. Yes getting a loan is different than it was 2 years ago as mentioned in the article. To get a loan today you must prove you could make the loan payments. A strange concept? You see history repeats itself; it used to be that way. A buyer’s credit needs to be good but not necessarily excellent. With 20% down you get the very best interest rate. With 10% down you could buy a home and get a pretty good interest rate. You could even buy a home with 3.5% down using a FHA program. With the 3.5% down FHA Loan a premium interest rate is charged but it allows a buyer to take advantage of the best home buying opportunity in years.
My friend lives in Hillsborough and to purchase a home there or in Burlingame, San Mateo, Foster City a super jumbo loan is generally necessary. He said “oh you can’t get those loans”. I replied “no problem just the rate is a little higher.” I knew he purchased his home in the 80’s when interest rates were in double digits, so I asked him “what interest rate did you pay when you purchased your home.” He said “14%.” “So what is the problem when you could get a loan for half of what you paid” I asked. He shrugged his shoulders. Taking a lesson from retail this is like the Day after Christmas Sale; Half Off. Interest rates are below average the 25 year average of 8.5% and prices are way below average prices of the last few years. Investors will be required to put 25%-35% down and pay a premium interest rate, but the upside potential is so great it is not stopping them.
Many potential buyers are saying they are saving more money for a down payment. I try to make them aware of the different loan programs out there with the low down payments. The newspapers have brainwashed many people “You Can Qualify For a Mortgage, It’s Just Tougher” by Marni Leff Kottle of the S.F. Chronicle is the first positive article on home loans in a long time. With today’s current low interest rates and the incredible low home prices I will state my mantra; “It Is Better to Own Real Estate and Wait than Wait to Own Real Estate.”
If you enjoyed this post, subscribe to the Author's RSS feed or the Blog's RSS Feed!
Comments
10 Responses to “Getting a Loan is Not Impossible”
Leave a Reply
-
Our RSS Feed
PruCalVoices RSS Feed
Get Email Updates
-
Join us on Facebook
-
Join us on Twitter
-
Recent Posts
- California Prop 90 Update!
- Brisbane – Missing the Boat…
- Now is the time to pay up to trade up
- 12 Hidden Costs of Homeownership
- San Bruno Music in the Park 2010
- To Some Low Interest Rates are Better than the iphone 4
- Loan Modifications – They Can Be Done! Lots of Patience Required!
- Funny Real Estate Jargon
-
Categories
-
Archives
That’s a great post, Lee! I am going to tweet this to someone I have been following in Florida. It’s such an eye opener when I tell new potential buyers that they can probably obtain a loan if they genuinely qualify for the payments and with prices down, many people CAN!
Great blog Lee! Buyers need to see more positive news out there. Wow, what a great market for buyers…an abundance of property and low interest rates. I realize qualifing for the loan has been the clincher.
Great information, Lee!
You make it simple to understand a lot of complex
data.
Brian
Thanks Brian.
Can’t believe they are talking about rates of 4.5%.
Great Post Lee!
I actually saw the article before I saw your blog, but add to it nicely. Many people are surprised by the fact that others are getting loans, but as the title says, “You Can Qualify For a Mortgage, It’s Just Tougher”. Hopefully we can get as many people as possible to understand that. Keep up the great work.
Thanks Adam. It is amazing the negative influence the press has.
Maybe we need to do a wave with loan apps. Have a good day.
Hi Lee,
Thanks for the great information on qualifying for a loan. I have found that most buyers are glad buyers must actually “qualify” for the money they want to borrow. What surprises people is qualifying is not any more difficult than it used to be before the “no documents, no down” frenzy that took over the market.
Keep up the good information.
John,
I agree that we should be glad lenders are making buyers “qualify” for loans. There is some talk to ease up on the requirements. Not sure if I agree. There are enough loan programs out there and if you don’t qualify maybe they should just wait and correct their credit or save more money until they do qualify. When they say they don’t qualify all that is saying they don’t qualify for a home they can’t afford but they most probably qualify for a less expensive home. We have one and two bedroom condos on the peninsula for under $200,000. Makes rent more than mortgage payments.
[...] Homes in Daly City, San Bruno, San Mateo, San Francisco and South San Francisco are selling. To keep up with the demand Bank of America is falling behind on appraisals and is hiring outside appraisers. I spoke to a termite inspector yesterday. He had 5 inspections scheduled for the day. Need I say we did not speak long. There is a buzz in my office. Conference rooms are filled with buyer’s consultations. Banks dealing with short sales are moving faster and be more aggressively. If you are a first time home buyer or a seasoned investor; jump in, the buying is great. It is a PERFECT STORM for you. Low Prices, Low Interest Rates and Lower Inventory. Getting a Loan in not impossible http://www.pruvoices.com/2008/12/gettin-a-loan-is-not-impossible/ [...]
Couldn’t open the info about the Feb 4 event but am definitely interested in coming — where else can I find that info? I’m a first time home buyer and excited about getting into my own home before July 1.