Justin Perry's Mortgage Blog

Right now there are a lot of changes taking place in the mortgage industry.  Some of the largest lenders in the country have gone bankrupt (American Home Mortgage) and the banks that remain are tightening their guidelines.  A massive spike in foreclosures, coupled with a soft real estate market has caused bank's profits to plummet.  Whether you are a Realtor, a potential homebuyer, or looking to refinance; there are a few things you should keep in mind when working with a mortgage lender:

• Make sure your mortgage lender is FHA approved.   With Alt-A and subprime loans going by the wayside it is more important than ever for mortgage lenders to use FHA (a government sponsored mortgage product).
• Think about how you will document your income.   Low document loans now come with lower loan to value thresholds and higher credit score requirements.   If you want to get the best mortgage rates today you have to fully document your income.
• Be patient.  It is becoming more and more difficult to place loans.  Banks are changing their guidelines several times a day so make sure your mortgage banker has experience with various products.  Also, underwriting turn times are in some cases backed up a couple weeks. 
• Become familiar with loan sizes.   Jumbo loans (greater than $417,000) have seen big rate increases and tougher underwriting requirements over the past week.  If you need a jumbo you might have to fully document your income and your assets to avoid an increased rate.
• Talk to a mortgage broker!  With so many banks going out of business it is important that you speak with a mortgage broker who has access to 100s of banks.   You will continue to see different lenders close their doors so don't let that hold up your closing.  In the case of First Call Mortgage Co., we are a direct lender of our own funds.  We can lend on your loan if it makes the most sense OR we can broker you a loan through dozens of different banks.  So for example if your mortgage loan is with bank XYZ, and they go bankrupt we could lend on the loan ourselves or we could broker it out to bank ABC. 

In such a volatile market it is most important that you know and trust your mortgage banker.  Please call me today if you have any questions or concerns.