Refreshing Lending News
There are some interesting recent changes in real estate lending that are benefiting Buyers and Sellers alike. This is refreshing after several years of the industry clamping down and being clamped down on as a result of their overall overzealous approach to lending leading up to the Great Recession. Instead of receiving new limiting government restrictions, policies or procedures announced on a regular basis we are learning of new loan programs that are true game changers.
Mark Clore of US Bank recently told us of a brand new lot/land loan program that is the best land money that we've ever seen, even in "the day". Lot loans have always been due and payable in 3 to 5 years, usually a big balloon payment. The new US Bank program is a 30 year amortization loan without a balloon. Add to that the lower down payment requirement of as low as 20% of the purchase price, a start rate of 4% on an adjustable rate mortgage, relaxed property requirements, and you've got a magical lot financing program.
In the days of big equities most lot Buyers would take out a loan against their primary residence to buy their property. With the evaporation of equity this isn't easy for many people wanting to buy land. Sellers often need to carry the Buyer for awhile if they want to get sold. This type of loan allows Sellers to get cashed out and the Buyer get a better loan rate without a short time balloon than they would expect with owner financing.
Jake Fair of Wells Fargo recently introduced us to the Wells Fargo timely close program and several subtle benefits that are not well known to the public. Wells Fargo is in the top ten for closing time performance as a result of a corporate resolve to have things close in a timely manner. That mindset has extended throughout the company with happy Buyers, Sellers and Agents appreciating their concerted effort to not only be able to close on time, but to be ready to close early in most cases.
Other benefits include payments or credits for different Buyer types. For example, members of a union can receive up to $1,000. Veterans, too, get financial benefits from Wells Fargo due to their veteran status. Jumbo loans can now be as high as 89.9%. Only 10.1% down with no points, good rates, and no mortgage insurance!
Remember the miracle loan offered by the USDA, the Rural Development 100% Guarantee. It is a zero down loan with a reasonable rate and terms. With the right circumstances you can buy a home with no money out of pocket and have your house payment be nominally more than you are paying for rent. Sound too good to be true? Call a good real estate Agent that is familiar with the program and you might find yourself living the dream. This is for rural areas, but some areas near cities qualify, i.e.- Cold Springs outside of Reno. Good just might get better for you. Ask your Agent about the "gap money" aspect of the loan.
Our Advice: These are amazing programs and opportunities and you don't need platinum credit to qualify. Interest rates are still wonderfully low. Housing prices have increased over the past 18 months, but they are still very affordable given the low interest rates and our regional demographics. We are seeing many boomerang Buyers, those that lost a home to foreclosure or short sale, coming back in the market and getting new loans. If you are waiting and watching the real estate market go buy wondering if you could participate, it's time to call a good lender to see what you can do. You will likely be very surprised at how easy it is to get a loan.
We have many good experienced Lenders in Northern Nevada. Don't experiment with a Lender, get a good one. Your Agent can give you the names of several good ones that you can interview. A good Lender is a very valuable component of your real estate transaction.
When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!