Buy a House Fast

You’ve probably heard a lot of contradictory information about getting a mortgage loan lately.  Interest rates are low, but it is harder to get financing.  Part of the reason getting a mortgage is hard may center on your income or credit score, but there are often other reasons.

The culprit may be the house itself.

Right now, there are many housing bargains in the marketplace, especially on foreclosed property. The cheap price often reflects the condition of the place. Costs can add up when replacing appliances, windows, water lines, and pieces and parts often taken by former owners or vandals.  Some lenders refuse to finance these deals or may bail on a promise of financing once they determine the home’s true condition.  In some cases, a prospective owner might look for a 203k loan that wraps repair costs into the mortgage, but often these deals are cash only.  The amount required for repairs may put the value of the home out of sync with values for other homes in the neighborhood.  Lenders, already stuck with mortgages worth more than homes, don’t want more deals like this.

Some loans are turned down because the appraisal showed the home was worth less than the prospective mortgage.  Lenders won’t write loans where the appraised value is out of whack with the selling price.  (Why?  See above.)  Appraisers used to modify their estimates when needed, but new rules have limited communication between the appraiser and all parties in the sale.  After the fact, an appraiser might reassess if comparable neighborhood selling prices show he was too low, but he may not budge.  The buyer can request a second appraisal, at his own expense.  Bottom line, either the seller must agree to lower the price or the buyer needs to come up with more down payment if he wants the mortgage.

If you are buying a condominium or a co-op, your loan might be turned down because the bank doesn’t like how your condo is run.  Some banks won’t write loans if more than 10% of the units are owned by a single owner since this would increase their risk if that owner defaulted.  If a building has been converted to condos from apartments, if the owner has bought units back, or if the owner holds back some of the units for rent, many banks won’t finance the prospective owner of one unit.  Banks might also refuse loans if the association doesn’t have enough insurance to protect against theft by employees or enough reserves set aside for repairs.  Before you apply for a loan on a condition, make sure to check what the lender’s requirements for condo loans are.

Looking for a home in DC, Maryland, or Virginia? Express Realty Services will help you find a home you like and point you to a lender who can help you.  We specialize in selling remodeled, renovated, and refurbished homes acquired by our sister company Express Homebuyers.

Lost in the Crowd?

When buying a home, you will likely become acquainted with a whole slew of real estate professionals.  From the realtor who helps you select a home to the listing agent who shows you some promising inventory, the experience can be difficult (and extremely frustrating) when any of these pivotal characters fail to meet your expectations.  One of the most controversial areas today is the whole appraisal process.

Help for the Weary

The folks over at Fannie Mae and Freddie Mac are doing their best to ensure that no one plays fast and loose with the appraisal process.  To that end, they’ve created a new code that holds appraisers to a higher standard of quality and professionalism. Sounds great, right? Well, it has already gotten serious backlash from people in the real estate business who believe stricter rules can only hurt an already struggling housing market.

As a result, Fannie and Freddie have tried to clarify what the new code means for homebuyers like you.  One major change outlined in the clarification document is the need for mortgage lenders to accept appraisals only from professionals with experience in the region in question.  Think about it: wouldn’t you want the appraisal coming from someone who knows the area your future home is in?

While communication between and real estate agents is permitted in the process (after all, realtors can be an excellent source of information), they cannot have a hand in selecting the appraiser.  The concern here is that a realtor eager to close a deal will select an appraiser they enjoy a mutually beneficial relationship, one willing to provide the estimate necessary for the transaction to be completed as quickly as possible.  Similar arrangements can often exist between appraisers and lenders, who have been known on occasion to lean on appraisers to overstate property values. While that may help a seller sell his house fast, it certainly won’t help when the buyer faces this dilemma: “I wanted to buy my house fast, but it didn’t meet appraisal. Now what do I do?”

Appraisal Delay or Consumer Protection?  You Decide which is Best.

Basically, Fannie and Freddie’s goal in creating a new code is to protect the homebuyer, and restore purity to the appraisal process.  Whatever delay these new measures may cause will be more than made up for by the increased confidence buyers will have in the accuracy and integrity of the professionals they turn to for an estimate.