March 3, 2010

The Times they are a Changing....

It has gotten increasingly difficult to qualify for a loan, the banks having been given the bailout in order to help homeowners, seem to want to clutch that cash, not loan it out. It takes a much more solid buyer with a solid income in order to qualify for a loan these days.
The good news is that I have been able to convince sellers to provide financing for buyers.. so even if you don't look perfect on paper, we may be able to help you!  We have some seller financing on 4 of our listings.. call for more information.


Interest Rates currently under 6%! 

FHA - FANNIE MAE
The new guidelines for Fannie Mae loans in San Juan County is currently $483,000 with as little as 5 % down for qualified buyers. FHA loans with 3.5% down.  Available for primary residence only.

VA LOANS
100% financing available.

Get Pre-qualified
Nothing is more disappointing than finding your property and then not being able to afford it. I recommend that unless you plan to use cash, become pre-qualified. I work with a local Mortgage Broker, who can do this for you in less than 15 minutes. Call or email and I will have her contact you.

Down payment: Homes and Land
The best terms and easiest loans are available with 20% down for houses. Houses are easier to finance, and can be financed with smaller downpayments. Land loans require 25% to 30% down, water availability and septic permits.

Wells cost between $6,000 and $12,000 generally, water hookups on Orcas start at about $6,000, and a rain water catchment system starts at about $12,000. Septic permits are generally provided by the seller.  If you are considering land, remember that the larger the parcel, generally the higher the development costs: land clearing, roads, site preparation.


Home Equity Line of Credit
Many second homes are purchased thru Home Equity Lines, or provide the down payment . Before going out to look at property, be sure to be qualified for your Home Equity, so you know what you have to work with. Many Home Equity lines require an appraisal on your home.

Rent to help Finance?
While rents on Orcas are not commensurate with home values, it can help you pay the mortgage. A 2 bedroom home on Orcas rents for about $1,200 to $1,400 per month, a 3 bedroom for $1,300 to $1,600. Rents cap out at about $1,800 per month. Summer rentals are an option with weekly rates of $700 to $2,0000 for a waterfront home.

Owner Financing or Private Money  
As the banks have tightened their lending practices, it has become much more difficult to borrow money if you are self-employed or do not show tax returns to support your loan. One lender has told me that they will lend up to 55% of your debt to income ratio, but most are far more conservative. Because of this I have urged my sellers to offer owner financing when ever possible, and will always inquire about the possibility of owner financing when writing an offer. It can't hurt to ask!  We also know of private lenders who will lend with a strong down payment.