4 WAYS TO AVOID REFINANCE REJECTION
4 WAYS TO AVOID REFINANCE REJECTION
Obtaining a new real estate loan is more difficult than ever. Banks, investors and the government have changed their tune since the high flying, no holds barred financing frenzy of the first six or seven years of this century.
In the current market, you actually have to have an income and assets and you have to produce concrete proof of their existence. The days of the NINA loan (No Income, No Asset–the borrower with a decent credit score did not have to produce proof of an income or of any assets to get a loan) are gone forever. The pendulum has returned past center and is now at the other end of its swing.
Naturally, now that loans are more difficult to get the market has adjusted to the much lower volume with lower interest rates. However, underwriting guidelines are as tight as a drumhead and only the most qualified are approved. Some of you may remember the old line often used in the movies from the 1930s, “you can’t get a loan from a bank unless you can prove to them that you don’t need the money.”
Lenders are looking for borrowers with credit scores in the 700s, the higher in the 700s the better. Many want a buyer to put 25% down, not the 20% that they have required for decades.
So how, you may ask, is a homeowner paying a high interest rate going to qualify for a refinance loan in this market? Unfortunately, unless that homeowner’s circumstances meet the stiff underwriter guidelines, they can’t. A good loan consultant will be able to determine if their situation may result in a loan approval before the lengthy process begins.
If the lender rejects your application, what can you do? The answer is; it depends on your situation. The first thing to do is consult with your loan consultant and make sure that you understand the reasons for the denial.
Shop Around: You may be able to apply to another lender. Although the primary guidelines are the same with almost all lenders, there may be some slight differences. Some commercial banks and credit unions service their own loans and can be more forgiving about certain issues than will be the large banks who sell their loans on the secondary market.
Low Credit Score: Credit reports are notorious for their inaccuracy. If there are errors on your credit score that have a negative impact on your score, you can get them corrected in a little over a month. You can also work with a loan consultant to fix some of the other problems listed on your credit report, but that can take much longer. Paying down credit card and other loan balances usually helps.
Equity Too Low: This is a common problem today. The market value on almost everyone’s home is down. It is difficult to get an appraisal for a higher value and appraisals cost $ 350 or more in most instances. If you have access to funds, you could do a cash-in mortgage, in which you contribute more cash to increase your equity position, making a refinance more acceptable to a lender.
Debt-to-income ration to high: Lenders do not want a borrower’s debt service to exceed around 40%, that means not only housing costs, but monthly payments on credit cards, store cards, auto loans, student loans, alimony and child support as a percentage of your gross (before taxes) monthly income. The government wants that ratio below 31%.
Paying down account balances is the only way to improve this ratio. One must also stop adding to those accounts to maintain an acceptable level.
Jack Guttentag of Inman News has written an excellent article on this subject. Select this link to access that article:
http://lowes/inman.com/newsletter/2011/11/09/news/161188
40 Percent of Metro Areas To See Price Increases In 2011
According to a recent real-estate market forecast from Veros Real Estate Solutions, 40 percent of major metropolitan areas will see appreciation in home prices over the next year. Veros looked at the median price tier in cities of 500,000 or more and expects a 2.5-to-3.5 percent increase in values between December 2010 and December 2011 in select markets. Eric Fox, Veros’ vice president of statistical and economic modeling, said, though things aren’t happening quickly, they are getting better and, even in depreciating areas, the forecast remains much better than those from a year ago. More here and here.
El Dorado Hills and Folsom are included in the Metro Area under discussion.
4507 ARUNDEL Rd. Pollick Pines–14 Acres
JUST REDUCED– HUGE REDUCTION–SELLER MOTIVATED!
This secluded get-away is conveniently located only five minutes from Highway 50 and 1.5 miles from Jenkinson Lake, just south of Pollock Pines, an ideal combination of convenience and privacy. There is paved road access all the way to the parcel. Lake Tahoe is slightly over one hour away and San Francisco is just over 2.5 hours away.
Much of the preparation is been done for a buyer planning to build their halcyon dream home. There is PG&E power to the parcel, a highly productive well in place and a perk test report available. The roughed in building pad may be used. However, a recently refurbished logging road rambles across the parcel, providing easy access to much of the property, facilitating selection of any number of building sites.
The area consists of up-scale custom-built homes set on bucolic parcels of just over four acres. Potential exists to split this parcel into three (buyers considering that option should consult El Dorado County for more definitive information).
The present owner had obtained approval to harvest timber from this parcel but never exercised that option. A buyer may be able to obtain similar approval and collect the associated income (buyers considering that option should consult the Department of Forestry for requirements).
A buyer may be able to harvest the timber, split the parcel and build on one of the divided plots. Possibilities abound!
Buyers looking to get away from the noise, traffic, crime and heat of the city or the valley may wish to consider moving to this stunning foothill location. Become a modern day Paul Bunyan!
Feel free to call (916) 337-0658 with questions or to make an appointment to view this unique property.
More Photos:
50% OFF ON HOMES FOR SALE—NO SCAM!
50% OFF ON HOMES FOR SALE—NO SCAM!
We are inundated with marketing material promising that if we only buy X product we will lose weight, develop Schwarzenegger-like bodies or grow hair where none has grown for decades. Naturally, we tune out and go about our daily activities.
However, for the very narrowly defined guidelines, the U.S. Department of Housing and Urban Development has a program that allows those qualified to buy homes for 50% off the asking price. In many cases, qualified buyers can also obtain FHA financing on their purchase and may only have to put a $ 100 down payment!
Now, you ask, what is the catch?
- It is simple; to qualify the buyer must be a first responder (Law enforcement officer, fire fighter, emergency medical technician) or a teacher.
- They must be employed in the qualifying position full time
- They can not have owned a home for the past twelve months
- The property MUST be their only residence
- They have to agree to live in the property for at least three years
- Only specific HUD homes qualify
A HUD home is one in which the previous owner had an FHA guaranteed loan. That borrower defaulted on the loan and the lien holder foreclosed on the property. (Once the lien holder completed the foreclosure process they have the option to sell the property as an REO-bank owned home–or they can transfer the deed to the Secretary of Housing and Urban Development in exchange for the FHA insurance coverage.) Once HUD has title, they market the home as a HUD home. http://www.Hudhomestore.com
Those homes located in areas that HUD determines are eligible qualify for the Good Neighbor Next Door Program. Those are the homes available to qualified buyers at 50% off the asking price!
The qualifications are very narrowly defined and the homes may need some work. However, if you can buy a $ 200,000 home for $ 100,000 with only $ 100 down, there is little room to complain.
Note that not all Realtors are qualified to represent buyers in the purchase of a HUD home. Naturally, we are. So, if you, a family member or friend are qualified for this program, give us a call. We will be happy to help you find properties that qualify and represent you in their purchase.
5587 Badger Hill Rd. Pollock Pines
EQUESTRIAN RETREAT
The Home: Ensconced on a secluded 42.8 acre parcel among the tall trees, this custom-built home has a decidedly rustic ambiance, yet replete with the latest up-scale amenities. The open floor plan contains 3604 square feet on the ground floor with an expansive finished storage area above the bedroom wing.
Main access is through the double door entry from the covered patio that is set up as an outdoor room complete with a fireplace and ample room for entertaining large groups. The GREAT room features beamed cathedral ceilings, tiled and carpeted floors and a wall of glass on the eastern exposure. The wood-burning fireplace is surrounded by an elegant sitting area. Other sections of the great room include a wet bar, gourmet kitchen and formal dining area. The guest powder room sits just off the great room.
The gourmet kitchen is a chef’s dream. The expansive island with granite counter top provides seating for at least seven and contains a food prep sink. All appliances are stainless steal. The gourmet 48” Thermador gas stove (six burner/griddle with double ovens) is augmented by a built in microwave/ oven combo near by. A trash compactor and dishwasher are located near the main sink. The built-in refrigerator matches the custom cabinets and the pantry is conveniently located within arms reach.
The wet bar contains a sink, wine refrigerator and seating for at least five.
A broad hallway leads from the great room to the bedroom wing. An impressive natural wood staircase leads to the finished storage room above. Under the stairway is a sitting area, ideal for quiet conversation.
Three spacious bedrooms share a Jack & Jill & Jane bathroom with triple sinks, a multi-head tiled shower and separate toilet. A large laundry room is located in the bedroom wing. It includes generous storage space, tiled counter tops and sink.
Double doors lead to the master suite featuring beamed, cathedral ceilings, fireplace, his and hers walk-in closets, carpeted floors in the sleeping area and tile floors in the bathroom. There is also direct outside access. A tiled steam-room/shower, claw-foot tub, dual level sinks with a vanity completes the picture. The office area is located just off the master suite.
Located near the home is an 18’ X 70’ covered parking structure, room for numerous vehicles.
Equestrian Facilities: The equestrian facilities are located just out of sight of the home. The six- stall barn contains a tack room and there is a paddock on each side. The impressive round pen is set in front of the barn. Parking is available for a fleet of vehicles and numerous riding trails traverse the property.
The Parcel: This tranquil parcel is blanketed with tall trees. A year-round stream feeds the pond near the center of the parcel, passes over the dam into a waterfall, meandering across the remainder of the parcel. The foothill location provides a natural escape from the valley heat during the summer and the noise and pollution of the city are far away.
Although the setting offers the ultimate in seclusion, Pollock Pines and Highway 50 are only a few minutes away. Lake Tahoe is about an hour drive and down town Sacramento about 45 minutes. The gently rolling hills are ideal for riding and offer the potential for vineyards or orchards. Possibilities are only limited by the imagination.
