Turmoil and challenges generally result in change and there sure have been some significant changes in mortgage lending over the past year! I’ve been working in this business for over 15 years and have never witnessed anything like it. However, it’s not all bad. Sure some loans are not being made that would have been, but, many of those loans never should have been done to begin with! Imagine you’re a lender and a new customer calls you and says his credit rating is weak, he has no verifiable income and wants a zero down loan with interest only payments. Are you bursting with joy to have this great new borrower? Do you feel confident that you will receive all of the loan payments on time? Heck no! This loan is ugly and if it was your money you would not loan it out! Well, the mortgage industry made loans like that and now we’re paying for it.
What’s the good news? Well, the good news is that this type of compromise allows loans to still be approved. Instead of not making risky loans at all the loan can still be done, just at a slightly higher rate. We are actually still making Zero Down loans at really good rates. I have also gotten some very tough loans approved in the last couple of weeks, so, if a loan makes sense and it’s packaged properly it’s still getting approved and mortgage rates are as low as they’ve been in the past 2 years! It’s another great year to be a home buyer and mortgage loans are still being made at low rates so Let’s Make it Great in 2008!