If the Fed Lowers rates again ....

[4RE KLR]

Jamo,
They are already are doing that. Mortgage companies are now going to the extreme for qualifications. Interesting that all the Realtors and mortgage brokers that were making a killing over the last two years now have their big a$$ homes for sale and are looking for work.

Here is an example of what is coming for the mortgages of our future. This is a true example of a client I "was" working with. Lost the deal because of financing. He said "I guess Now is not the time to buy after all"

EXAMPLE: (real numbers were different but you get the picture)
New home cost $100K
Appraisal is $100K
On his job for over 20 years
790 FICA score
All is right with the deal right?

NOPE:
Mortgage company writes down appraisal 20%
Home now appraises for $80K (cost more than that much to build)
Mortgage company will finance 80% of appraisal amount or $64K
Client has to put $34K down payment and pay TWO points.

That is 36% down with excellent credit, very stable and on job over two decades!

The guy walks and Says "Now is not the time to buy a new home."

[VRM]

Originally Posted by 4RE KLR

Jamo,


NOPE:
Mortgage company writes down appraisal 20%
Home now appraises for $80K (cost more than that much to build)
Mortgage company will finance 80% of appraisal amount or $64K
Client has to put $34K down payment and pay TWO points.

The guy walks and Says "Now is not the time to buy a new home."

So what kind of rate would he be getting for all that?

Good for them for finally figuring out that they need to restrict things a bit, but they are just going to hurt themselves by being ridiculous about it.

I refinanced from 7% to around 5.6% fixed, and I plan to stay right there. I also have a line of credit that I don't use. It costs me nothing unless I use it. And I have no plans to use it, despite what my wife says...

Steve