re you wondering what’s new and exciting in the world of Mortgage lending? Well, I never expected to STILL be in the refinance frenzy – but we are. I remember the exact day that rates first plummeted – at least this round. Believe it or not, it was late 2008. We were thrilled with rates below 5.0%, now we are ecstatic, enjoying rates below 4.0%! I’m asked daily (sometimes hourly) what is my rate prediction? My standard answer, “rates are likely to change”.
As far as the Purchase side of lending (certainly my favorite), there has NEVER been a better time to buy. I know you’ve heard that time and time again, it’s really not a marketing ploy – it’s the truth. Why you ask? Well certainly rates are the biggest factor. It increases your buying power, allowing you to buy more house for your money. Another factor is the number of houses currently on the market. It’s a Buyer’s smorgasbord! Lastly, loan programs to help with the downpayment. Most of these are reserved for first-time homebuyers, but certainly not all of them. Have you heard about the IHDA Home for Heroes? A $10,000 (yes $10,000) Grant for Veterans, Reservist, and Illinois National Guard. How about Illinois League? ANOTHER $6000. How about IHDA? 3% of the purchase price. I could go on and on. I love to layer them, taking advantage of as many as you qualify for. In some cases, enough Grant money to have a 20% downpayment.
Lastly, I want to touch on something I hear regularly, and that is that mortgage lending guidelines have tightened up so much it’s impossible to get a loan. Couldn’t be further from the truth. After 23 years of mortgage lending experience, I’ve seen both ends of the spectrum. In the early days (late 80’s early 90’s) I’ll admit the mortgage loan process was quite cumbersome. Somewhere around 1994, it seemed if you could hold a pencil, SOMEONE/SOMEWHERE would give you money to buy a house. By the way, I am thankful I never participated in those “liar loans”, that has devastated the housing market. So, where are we at today? Back to common sense Underwriting, that’s where. EXACTLY where we should be (in my opinion). It’s back to the basics. You need a job to buy a house. You need to make enough money to support your payments. You need to demonstrate your ability and willingness to pay your bills. It’s really THAT simple. And quite frankly it should be.
So really, what ARE you waiting for? A pre-qualification is free and non-obligating. Why not see what you can do? My one piece of advice is to work with a local lender that offers a variety of loan programs, and has access to the Grant programs, and a Loan Officer who has experience. This is probably your biggest purchase yet, it’s comforting to have a good Lender hold your hand through the process!
Teena Taylor, Busey Bank