The Real Voice of New Jersey Real Estate

Quick Story & Staunch Reality ....

A young gentleman was pre-approved.  While a small loan, it is significant for him since it is the very first house he has ever bought.  The closing date is on the back end of November's Ides...

The supporting documentation was collected and the appraisal was ordered, yet over the weekend, he spoke to the Family Attorney.  Mr. Attorney recommended that he shop around.  Alas, the chap was "approved" at a local bank at an interest rate that was about a half percent lower than we quoted.  So, he went that way.

Days later, meaning today, it so happens that the local bank turned him down.  While getting into specifics may be a bad thing, they low-balled a legitimate rate they could offer him and their debt ratio requirements are tighter than an amateur porn star's balloon knot.  (No, you didn't just write that.  Yup, I did.)  They turned him down.

So, we are starting over to an extent.  The appraisal must be re-ordered and now we can actually send the file to Underwriting.

I'm a champion of folks shopping around, just not so late in the game.

The next time you shop, try the Family Attorney.

http://www.robbinsvillehomesforsale.com/009FF8

Before I attempt to answer that question, interested readers should know something.  I am a loan officer by trade.  That's what they call us.  I don't particularly like that title, but what's in a name?

I don't get paid an hourly wage or a salary.  If I don't close loans, I don't make a dime.  If I don't make a dime, that means I can't eat, drink, or even sleep if I can't afford to make my mortgage payments.  That's not a sales pitch, that's a reality.  It's in my best interests to close every loan that comes under my wing.  While there are ethics involved to ensure you are doing your client right, if I can offer and do a loan for you that puts you in a better financial situation, I want to close your loan as fast as possible.  It's not only in your best interest, but mine as well.

So why is it taking so freaking long?  Good question.  Here's a few observations on my behalf:

• More volume with less 'able and willing' people to deal with it.  Let's be honest here (I love that line:), the mortgage industry isn't exactly the most attractive line of work to get into now.  To boot, a whole lot have left it.  I'm still here because I'm stubborn and good at what I do.  Plus, I believe you have to go through hell to get to heaven.  Call me selfish, but I think my time here will work out very well in the end.  Even if it doesn't, Economics 101 has us dishing out the phrase, "Too much demand and little in the way of Supply." 
• Front-end incompetence.  If you are searching for a pre-approval from a lender, get the appropriate documents in order before you ever even fill out an application.  If they don't ask you for such documents, they may have more ties than me.  Either that, or the final result won't be what they promised.  Do yourself a favor, get your W-2's, pay-stubs, bank statements, etc, in order.  If your loan officer doesn't ask for it immediately, ask them why they don't need them.  That will put a spark up their ass.
• Changes.  This is a tough one.  It's hard to tell someone who is a completely competent borrower, why the area they are in or the house they chose isn't on the "I love to lend in" realm.  The only real advice I have on this one is if you are dealing with someone you trust, they will get you through the current bullshit that is going on.
• They just don't like you.  Well, we live in a society where that is not acceptable.  Folks actually look at your loan, but you aren't nearly as personal to them as you would like.  I work for a relatively small company and see that.  I can only imagine what working for a large one would entail.  Work with an individual that you trust, that you can reach out to and at least communicate with.  There is a common thing with that, you both share the same self-interests.  He/She gets paid only if your loan closes.  You only get what you desired after paying for an appraisal, maybe an inspection or two, and actually being able to be comfortable within the confines of a few walls that aren't labeled as "Prison".
• The Government.  Now, I really don't want to wax political or get involved in any sort of debate about policy, parties, or general ideology.  But I already have since mentioning this.  We don't need the Government in this Private Sector.  We didn't need them back then; we don't need them now.  Those of us (I include myself because frankly, this is my business) who know the Real Estate Industry also know how it is to be corrected.  Let's demonstrate how we will make sure such an extreme reaction to market won't happen again.  It's a cycle, learn to ride.

We'll reach those Golden Years, but it takes work and patience.  Why is it taking so long for your loan to close?  Because this ain't a pay-day loan, this is a roof over your head.  Maybe this is the opposite extreme of giving everyone with a pulse a mortgage, yet you know what they I say about extremes... "They are to be avoided."

Jason Sardi, Mortgage Consultant

http://www.robbinsvillehomesforsale.com/0099C5

Homebuyers Tips to Sip From

Perhaps you've been throwing around the idea of entering into the wonderful world of buying a home.  Maybe you've even came across a house that not only tickled your fancy, but left that euphoric taste of bliss running through your bones.  Either way, probably the most important thing you can do is to become educated.  From there, there's one place to start... Behold, The Basics:

• Cash isn't necessarily King.  If you are paying rent, pay it on time and do so by check.  That's a documented housing history.  Any applicable down payment you have has to be sourced from the banking institution with whom holds your depositories.  Documentation is one of the important things lenders look for these days.  So, if you are slinging crack in the alleys in your spare time, instead of putting that money in a jar beside your bed... put it in the bank.  Of note, I don't endorse slinging crack.  I just endorse documenting your rental history and funds that you have to come to the table with to close.
• Before even traveling down the road of tangibly looking to buy a home, know what your credit score is before making any decisions.  In the current lending atmosphere, your credit score has never been more important.  Here's a link to help you get a grasp on the importance of credit in borrowing money in general, let alone to buy a home. 
• Don't be Mortgage Poor.  Many times you are pre-approved for X amount of dollars because on paper, that is what the lender deems "affordable" in your world.  There's one small problem with that, the lender doesn't live in your world... You Do!  Sit down and go over your monthly expenses (utilities, credit cards, student loans, car payments, insurance, groceries, any vices you like to partake in, etc) and come to an understanding of what type of payment is comfortable for you.  And don't forget to figure in the taxes, home owner's insurance, and PMI/MIP (if applicable) along the way.  Your Mortgage Professional can help you with that.  By the way, I'm a Mortgage Professional and enjoy helping:)
• A Tax Advisor can be your friend.  While I realize that the words 'tax' and 'friend' are strange bedfellows in the same sentence, read on.  A lot of you folks may have heard about the tax credit for home buyers and for those who haven't, remove the rock and continue reading.  First-time home buyers (includes folks who have not owned a property for at least three years) qualify for a tax credit of up to $8,000 if purchasing a home before December 1st, 2009.  As long as it's own-occupied for at least three years, that credit does not have to repaid.  If that doesn't give you enough incentive, all homeowners qualify for tax credits for various home energy efficiency improvements throughout 2009!

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If you are going to Boogie...  Learn to Dance

As many of you know, the Mortgage Market is changing faster than Tom Welling's Superman character into his "get-up" in the television show, Smallville.  It's truly a jungle out there and you'll need a Machete, Cargo Field Pants, and the proper Guide to navigate you through the ever growing foliage.  As a guide in the jungle that is the Mortgage Industry, I wanted to give some simple bits of information to arm you on your journey.

In no particular order, please take note of the following as they may be pertinent along your travels:

• As of April 1st, 2009, FHA will reduce the LTV's (loan amount compared to the value of your home) on cash-out transactions.  It currently is 95% but that will be cut back to 85% real soon.  To ensure you can get in before the guideline changes, an appraisal case number must be assigned to your home before said date.
• 100% Financing is still available!  Yet, the only two products currently sporting this popular product are VA & USDA Loans.  For more information and shameless self-promotion on the latter, click here.  Might I add that if you are going to utilize 100% Financing, try to ensure you have money in the bank after the fact.  Being a homeowner bears certain responsibilities.  God forbid something goes wrong and you don't have Lenny The Landlord to fix the issue.  You don't when you own a home.  The responsibility falls on you.
• Know your Credit Score.  I can't stress how important that is these days.  I got word from one investor today who has changed their minimum credit score on ALL Mortgage Products to 660.  Most are at 620.  A few still may go below that but proceed with caution.  Know the rules and learn to use them to your advantage.  For more extensive insight on Credit, grab that mouse and left click right here.
• Pay close attention to what homes like yours are selling for (not just being listed for) in your area.  That's a good indicator of what your home is currently worth in this market.
• While the media may give you the heads up in the drop in interest rates, contact your Mortgage Professional to get the real scoop.  Taking the anchor of CNN's advice on where Mortgage Rates are at are akin to asking me what the weather will be like tomorrow.  By the way, you can expect a balmy day with hints of fog glazing the ides of morning... turning into a slightly breezy, overcast, but generally nice day.  High will be 99 Degrees.  Low will be -20.  But don't quote me on that.
• If you are considering buying a home in the least bit, be aware of the First-Time Homebuyer Tax Credit.  It could prove to be another incentive (in addition to low interest rates and a large amount of inventory) to take that next step in owning your own home.  It isn't a reason in of itself, yet it is icing on what could be a very delicious piece of cake.

I will be writing about five more useful tips very soon.  I wanted to keep this short and sweet, like Ryan Seacrest:)  Besides, you only have so much time on your hands while you sift your way through this jungle.

And if you aren't already a homeowner, you may want to take that leap.  If you have the right Guide, you aren't just drawing on faith when you are in mid-air.

About The Author:  Jason Sardi has been on the lending side of the Real Estate Business for over eight years.  His passion for helping people and general disdain for con-artist blowhards has kept him trying to do right by as many people as possible along the merry way.  You can reach this happy chap by email @ jsardi@ihmci.com or by phone @ 610-439-2166 ext. 229.  He's a survivor in that jungle out there and has the scars to prove it:)

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Need to refinance a home in New Jersey?   Need to refinance a home in Robbinsville, New Jersey.   Please read this very informative article from my mortgage pal, Jason Sardi.

I got a call from an old friend of mine shortly after the New Year.  He wanted to consolidate his 1st & 2nd Mortgages into one loan at a reduced term, a financially savvy decision for sure.  So, onward we went with the process.

Now, this young gent lives in a rather eclectic neighborhood with properties that tend to differ in appearance, size, & condition.  His property happens to be one of the nicer ones in the neighborhood, which tends to make its worth not as ideal as one would like.  None the less, the appraisal was done and came in at a rock solid 290K.  The comparable properties were there, all except for a less than desirable abode across the street that had sold recently for 215K.  The appraiser noted it in the report and while it hurt the value of our subject property, the 290K was still as solid as Lou Ferrigno in the movie "Pumping Iron."

Well good old Murphy's Law came into play and the lender came back with their own search saying the value was only 230K.  Holy slap in the face Batman!  After the initial fury of wanting to briskly walk a few hours and give their Appraisal Review guy an Atomic Wedgie, we stepped back and got the facts.

It seems that another property sold literally right after the appraisal was done.  It was just down the street and it sold for 240K.  Uh oh.....that's not good:-(  So, the appraiser had to re-do the appraisal making note of this new comparable property that just came into play.  We went from 290K to 260K.  It didn't kill the deal by any means but it did introduce the dreaded PMI.

While it didn't help that they sat on the appraisal way too long for my or my amigo's taste, upon hearing this he became agitated.  To a large degree, I completely understood.  His payment would be going up $78.90 and he would have that dreaded term attached to him for at least 2 years.  That said, the deal was still a no-brainer across the board, making total financial sense.  But my amigo, a smart guy but stubborn like me, was going to throw in the towel and forget the whole thing.  Our conversation on the phone was relatively brief.  Normally, with any other client, I would point out the very reasons it made perfect sense to get it done even though it wasn't as ideal as it was initially on paper.  In this case, I didn't do that.....not initially.

After getting off the phone, I noticed the error of my ways.  I then sent him the following email.....

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