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Old 07-12-2012, 07:19 AM
 
19,183 posts, read 28,343,172 times
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Quote:
Originally Posted by Jayess1 View Post
And just as plainly have not. Downpayments should be a rule, not an exception.
Oh my. Are you familiar with the history of conforming loans and conventional lending?
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Old 07-12-2012, 07:32 AM
 
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I'm very, very familiar w/current mortage requirements, standards, and financial practices. FWIW, I didn't take out mortages during the 1950s, nor did the OP enquire @ such.
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Old 07-12-2012, 08:12 AM
 
Location: D.C.
2,213 posts, read 1,837,369 times
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I too am very familiar with lending practices, both currently and historically. I said in 2006, when I bought my home in NC, that when I can get a mortgage faster than I can get a Domino's Pizza delivered to said address, there is a problem. Having to actually prove your ability to pay back a few hundred thousand dollars to the bank, should not be considered a "burden" on the system, it should be, and has always been, considered proper financial underwriting. If you can't prove that you can pay the loan back, then you're wasting everyone's time in trying to get the loan.

That being said - the latest kool-aid supplier is, in fact, the government, with their FHA program.

OP - what you're seeing is folks who are looking at their rent payment, and hearing on the news of the unbelievably low interest rates. They go on-line to find a calculator, do the math, and realize they're paying pretty close to what a mortgage would be for a house, give or take a couple hundred. With that mindset, they start making offers hoping to buy. But...two people in this process have forgotten a golden step - call the mortgage lender first to get prequalified. Why would any realtor accept an offer from anyone who doesn't have a prequalification letter in their hand, and not put in a "kickout" clause to that offer (allowing the property to continue to accept offers), is beyond me.

If you get prequalified for a mortgage, which you should do in general if you're serious about buying a home, and you approach a home that you like that has an offer on it already, you should point out that you already have your financiing lined up. Might make a difference to the seller.

In the entire chain of what it takes to finance a piece of real estate today, no difference between commercial or residential, the one link in the chain that has come under the most scrutiny is the appraisal link. If you want say the process is too strict today, then I'd have to point that comment more towards the appraisal field, less to the lending field. Nobody is going to lend on a number that isn't supported by the appraisal.
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Old 07-12-2012, 08:37 AM
 
Location: Fairfax, VA
1,449 posts, read 2,803,107 times
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We never made an offer without a pre-qualification in place. I guess you're talking about people just making an offer without that in place beforehand? I don't even know how one would do that, but maybe that's because we never even considered such a thing.

How is the FHA program kool-aid? Don't those people have to put something down and qualify for the mortgage through income verification and what not? Really just curious - it doesn't seem to compare to the no document verification zero down loans that were being offered in the pre-crash era.
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Old 07-12-2012, 08:58 AM
 
Location: Censorshipville...
2,684 posts, read 6,244,611 times
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Quote:
Originally Posted by VRE332 View Post
I feel like knocking on the owners door and seeing if they'd like to make a deal.
I had something like that happen at my rental. I got a postcard at my p.o. box from a real estate agent who was representing a family who wanted to move into the neighborhood. There were no homes in the neighborhood for sale. I did a quick MLS search and sure enough, no homes were for sale in that subdivision. Not sure if it was legit, or just a real estate agent drumming up business but I thought it was an interesting gimmick.
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Old 07-12-2012, 08:59 AM
 
Location: D.C.
2,213 posts, read 1,837,369 times
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I see offers on homes that are either "contingent with kickout" or "contingent without kickout". My understanding is those with kickout are usually the ones where the buyer's financing picture isn't crystal clear, leaving doubt the buyer can actually close on the deal.

The FHA program is the one where you can still put down just 2.5% to buy a house. You pay for it in private mortgage insurance premiums, but those premiums don't count againt your loan to value in the open market, they're a "fee", not a "deposit". The reduced deposit level is also complimented by looser debt/income ratios. Literally, the only thing that has changed for the FHA program during this housing crash of the past few years is the private mortgage insurance premiums, and in certain cases, maximum loan dollars before hitting the "jumbo" market. But i think around here, they're still in the $700k range. Amazing really, whn you consider all the changes in the private sector requiring better credit scores and larger down payments.
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Old 07-12-2012, 08:59 AM
 
882 posts, read 1,777,270 times
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Not sure @ the "kool aid" either, but note that Galante extended the "anti flipping" waiver this past winter, and the current FHA (203b IIRC) reg allows for 96% mortage to roll in insurance & other costs - in simpler terms, these moves reduce upfront costs...

Ah, NC, thanks for the clarification.
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Old 07-12-2012, 08:59 AM
 
Location: Everywhere and Nowhere
14,131 posts, read 27,034,287 times
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Quote:
Originally Posted by NC211 View Post
Why would any realtor accept an offer from anyone who doesn't have a prequalification letter in their hand, and not put in a "kickout" clause to that offer (allowing the property to continue to accept offers), is beyond me.
Realtors don't accept offers unless they're for their own homes. They're required to present all offers to the sellers they represent, even if made by a lowly ditch digger. It's then up to the seller to decide whether or not to accept the offer. For some sellers it makes perfect sense to do that (the initial offer is good and they're in no hurry) while at the same time possibly taking a back up offer from another potential buyer.
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Old 07-12-2012, 09:05 AM
 
Location: Reston, VA
2,005 posts, read 3,530,161 times
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Quote:
Originally Posted by Jayess1 View Post
I'd have to disagree w/your premise. Housing demand (even w/the Fed pump across the Potomac) is down in a variety of markets. Current owners, OTOH, want to either recoup their costs or are still hoping for some significant profit even after short term ownership.
This may be very location specific - what I'm seeing in Reston (20191) is that homes that are priced right are selling quickly. Right now of the 24 SFH in 20191 currently under contract 11 went under contract in less than 2 weeks.
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Old 07-12-2012, 09:09 AM
 
882 posts, read 1,777,270 times
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Quote:
Originally Posted by JfromReston View Post
This may be very location specific - what I'm seeing in Reston (20191) is that homes that are priced right are selling quickly. Right now of the 24 SFH in 20191 currently under contract 11 went under contract in less than 2 weeks.
"Priced right" is the key. Western/SW FFaX county seems to have an inordinate number of sellers still seeking very high prices - at first. Once reality sets in (2nd time listed), time on the market is decent (but not 2 weeks - that's amazing, and a real + for the area)
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