Over the years, brokers have gotten a bad wrap. I work with people everyday who want to go with big banks and credit unions for their loans (because they haven’t done anything wrong in the past few years, right?).

Just recently I had a client who went with a big credit union for her loan, and 7 days before close of escrow, they decided to pull the loan because the bank had issues with the HOA. Lucky for us, Jeanie Bolger from Nova Home loans came in and saved the day. I can’t tell you the number of times this happens.

Here is what I learn and I want to share with anybody who is thinking about finding a lender:

1. Big banks are just that BIG. They’ve got lots of red tape and work to get through everyday, before they even think about giving you a loan. On the other hand, a mortgage broker is a certified professional who seeks the best mortgage terms for you by accessing a network of lenders that includes major banks, trust companies, credit unions and finance companies.
2. Big banks and credit unions tend to be more conservative on loans. So, if you have something out of the ordinary going on, like a second property, a divorce or a spouse with bad credit, stay away from the big banks, especially.
3. Underwriters work fast with Brokers. Jeannie’s brokers are in the same office, so she can work with the underwriter to make sure everything they need and you need is in place. Jeannie can physically walk down a hall and ask an underwriter a question about a loan and get an answer right away. They can’t do that in the mega bureaucracies.

I recently worked with Lonna to find a home downtown. Lonna wanted to go with a credit union because they had given her pre-approval. One week from closing escrow, the credit union pulled the loan and we once again turned to Jeannie.

Lonna loved working with her. “Jeannie answered all my questions immediately and spoke to me like she was trying to help. It feels like your being interrogated when your with a Credit Union, like you’re just a case number, but with a broker it was like they cared.” Once Jeannie took over, it only took two days from when the underwriter received the application to approval.

So, let me be clear: from the time we started to the time we close, Jeannie swooped in and got it all done within 5 days! Its gotta be a record!

So if you’re thinking of buying a home in downtown phoenix, use a broker. Heck, Call Jeannie!

Or call me for more information about the market: 602-456-9388.

Short sales sound worse than they are.

Two years ago they took a lot longer and confused many more people (agents and lenders, alike). Now the systems are in place to make these transactions close more smoothly.

Even more important, if you qualify for the HAFA Program, you could get up to $4,500 for short selling your home!

A short sale is where the seller owes the bank more than than the property is worth. The term “short sale” literally means that the property is being sold “short” of what the seller owes the bank. In a short sale transaction the bank must agree to accept less money than what the seller owes and agree to release all liens on the property so that the property can be sold.

If you’re thinking about short selling your home there are a few short steps to the process:

1. Find an Attorney to speak to about your short sale. This shouldn’t cost you a lot of money. You can usually get an initial consultation for about $250. You DON’T need to have an attorney negotiate with the bank for you. If you have a tax attorney or CPA, speak with him or her, too!

2. Get your Property Listed. Listing your property with a seller with short sale knowledge is key to a smooth transaction. This is where I come in.

3. Find a Buyer. You should know that the average “days on market” are much, much lower now than they were even six months ago. This really should not take us long.

4. Send a contract to your lender along with proper documentation. We’ll work with you to make sure all the paperwork is in order for quicker approval. This is the part of the process that takes the longest. But I can take much of the pain out of this.

5. Get Approval and Close Escrow. This part goes largely the way normal sales go –inspection, appraisal, close of escrow.

I see it more and more everyday. The housing inventory in Phoenix is shrinking and buyers are looking to make offers and get approved as quickly as possible. But for new or first time home buyers the steps to approval can be foreign and slow down the process, which is the last thing you want in this market.

But have no fear! Jeannie’s here!

It’s important as a home buyer to get pre-approval to expedite the process. In short: you want to have a pre-approval letter in hand before you even step foot in a potential home.

Now don’t get confused between pre-qualification and pre-approval.

A mortgage loan pre-qualification is simply an estimate of how much house you can afford and how much money a lender would be willing to loan you. This can be done over the phone in 10-15 minutes by providing information on your income, assets, debts, and a potential down payment amount.

A pre-approval takes more time, but can be just as easy. Getting pre-approved means that you have a tentative commitment from a specific lender for mortgage funding. You provide a home loan lender  with all that fun financial information you probably keep in a drawer in your house (tax returns, pay stubs, assets, debts, etc.) They will run a credit check and work to verify all your employment and financial information. Jeannie can take care of this with you in about an hour in her office.

In the house-buying process, the benefit of being pre-qualified or pre-approved is twofold. Not only do you have the added comfort of knowing what you can afford, the seller may also accept your offer over another if you are pre-approved and the other party is not.

So what are you waiting for?! Please call Jeannie Bolger, Sr. Loan Officer for more information.

Or call me for more information about the market: 602-456-9388.

Good News for home owners in distress!

And by “Good News” I don’t mean some shady scheme to short sell your house to an off-shore corporation in the Caymen Islands.

Fannie Mae is introducing an Unemployment Forbearance program which provides assistance to borrowers dealing with unemployment.

These loans will allow the borrower to receive a reduction or suspension of their monthly mortgage payment for a specific period of time and will prohibit services from foreclosing on your property.

A mortgage loan is eligible for an Unemployment Forbearance if all the following criteria are met:

• The property cannot be vacant, condemned, or abandoned.
• The mortgage loan cannot be an FHA, VA, or Rural Housing mortgage loan.
• The property must be a principal residence. Second homes and investment properties are not eligible.
• The borrower may be either delinquent or default is reasonably foreseeable.
• The borrower must have a financial hardship due to unemployment.

The Forbearance will be canceled if:

• Any of the eligibility criteria and terms stated above are no longer met.
• The borrower advises the servicer that he or she has become employed or is no longer actively seeking employment.

If you need more information contact Jeannie Bolger with Nova Home loans.

The City of Phoenix is now offering a $15,000 loan towards closing costs and down payment to purchase a newly renovated “Move-in Ready” homes through their Neighborhood Stabilization Program.

The Neighborhood Stabilization Program is an effort in response to the number of vacant foreclosures in Phoenix neighborhoods. Housing programs are popping up all over the Southwest in hopes of turning foreclosures into affordable, refurbished homes and enhancing neighborhood curb appeal.

NSP is offering an extensive catalog of renovated properties in established neighborhoods as well as providing guidance through the entire process.

To qualify, home buyers must meet these requirements:

1. Applicants must meet the income guidelines for household Family size. For Example, A family of 4 must have an income at or below $78,600 annually to receive the loan.
2. Candidate should be able to qualify for a 15 or 30 year fixed mortgage
3. Though you don’t have to be a first time home owner, you can’t currently be on title on any residential property.
4. Applicants must be able to contribute one half of the home’s required cash down payment for a min. $1,000. For example, a $100,000 home would require a $1750 down payment.
5. All loan hopefuls have to take a two hour one-on-one credit counseling and an 8 hour home buyer education class

A word of caution: I have helped buyers through this program. Half of the time it went smoothly and relatively quickly. The other half of the time it took longer and everybody was pulling their hair out. Now, to be fair, that was mostly because the listing agent’s contractors were not doing the basic things that the city inspectors asked of them.

Further, that was in 2010. Now NSP has homes that are already renovated. So, this is a whole new world from when the program just got started.

Regardless, families state-wide are in a great position to be homeowners in great phoenix neighborhoods. My friend Jeannie Bolger, of Nova Home Loans let me know all about this program and, as a mentioned a few weeks ago, she is experienced in these loans and could be a huge help in the process.

You can visit www.phoenix.gov/nsphome to view the Move In Ready list of available homes or give me a call today at 602-456-9388.

If you were one of those homeowners who had a foreclosure recently, did you know that you could become a homeowner again sooner than you think?

There is no doubt that a foreclosure affects your credit score, but according to Jeannie Bolger, Senior Loan Officer with Nova Home Loans, it all depends on your situation.

“After a foreclosure, your credit score will definitely go down between 100 and 200 points on the credit FICO score,” said Bolger. “But it’s a tough question because everyone’s situation is so different and it depends on past payment history, mortgage late payments and debt.”

But Bolger also said the waiting period after a foreclosure for an FHA loan is 3 years, for a VA loan it is 2 years, and a conventional loan is 4 years. Although this seems like a long time, it is a perfect time to re-establish your credit and make yourself more desirable for a loan.

And if you did foreclose on your home, Bolger believes there are some important tips you need to follow.

“Do not overbuy and really know what your budget is,” she said. “Have an emergency fund to allow for ‘unexpected’ emergencies and have a savings account to make mortgage payments if you lose employment or get sick.” Have your credit run 6 months after the Foreclosure by a mortgage professional so you will be better prepared to meet the minimum FICO score requirements required by the loan terms.

If you or someone you know foreclosed on a home, there are options available to ensure homeownership again. The US Department of Housing and Urban Development offers tips about foreclosure and information about the process.

If you would like more information on what it takes to buy a home again after foreclosure, give me a call today at 602-456-9388 and I can find you the perfect home in the valley!

Let’s face it, everyone and their grandmother has a cell phone these days.

Aside from the fact that teenagers can’t hold a conversation that includes eye contact, they are great things.

They are so amazing that 90% of Americans send text messages. This is a staggering number! I wonder if they count the “ppl wh txt w/o vwls”?

Another increasing trend is the number of Americans using smartphones! Over 34% of Americans use a smartphone in their daily life and that number is only increasing.

So what does this have to do with you? Well, if you are selling a house, there are new ways to give buyers instant access to information about a home! The number of people using apps, text messages, and a new thing called Quick Response code, or QR for short, are on the rise.

This is what I am most interested in when it comes to using this new technology as an advantage.

Remember last week’s blog post about how short sales are an increasing share of the Central Phoenix market? Unfortunately, this is the new reality for at least the next few years. But if you need to short sell your home, don’t worry! Using tools such as text messages and QR codes, I can help your home get seen above the other homes on the market. (See also my post from yesterday on other Short Sale Resources I’ve developed.)

Want to know how it works? It’s so simple and you can try it yourself!

Text the special 6-digit code on the flag to the number and you will receive information on this house.

Or, if you have a smartphone and a barcode scanner app on your phone, scan the special code and you will be directed to a special website with information on the house.

HOW COOL IS THAT?!?

Using this technology is a great idea and can really help increase the number of people that view the home. Using the old-fashioned flyer box is fine; the problem with those is the fact that you will have to continuously check and replace the flyers otherwise there might be a missed buyer.

Smartphones are amazing pieces of technology and having the ability to quickly access information can make buying or selling a home much easier.

So when you are looking to buy a home, how much do you think you need for a down payment? 5%? 10%? What about 20%?

I get people saying to me all the time, “I can’t buy because I don’t have 20% down.” But its not true!

I want to find the news reporters who keep this myth alive, dress them in Lady Gaga’s meat dress and introduce them to a pack of coyotes.

The reality is that with a high enough credit score, you could qualify for a loan where you only need to pay 3% down!

How amazing is that? A new home with only 3% down!

But what about all this talk of 20% down to qualify?

It’s all nonsense. Period. End of story. Jeannie Bolger, Senior Loan Officer with Nova Home Loans, believes the 20% down payment myth stems from misinformation and everyone wanting to give advice without actually doing the research.

(By the way. I love Jeannie. She is great. She gets people qualified and works hard throughout the process.)

So how can you qualify for the 3% loan? To begin, the loan is backed by FannieMae/Freddie Mac (aka, the guv’mt). According to Bolger, to qualify you need at least a 680 credit score. Keep in mind this is only a minimum and is not a guarantee.

Having a lower credit score doesn’t hinder you, in fact, if you have a credit score of 640 you could qualify for a loan with paying 3.5% down!

Don’t get me wrong, paying more as a down payment is great if you can afford it because it can save you money on interest rates. Plus, paying 20% down allows the home buyer to waive the mortgage insurance premiums.

This is an amazing opportunity for people to take advantage of and should not be passed up. With interest rates near (or under) 5% and homes at their rock-bottom prices, now is the best time in over 40 years to buy a home.

So snap up those short sales or foreclosures with an incredibly low down payment and give me a call today to help you find the perfect home!

Short sales. Foreclosures. The media will tell you how bad it is.

I’ll tell you, this is a market of opportunity.

But if you are going to take advantage of this opportunity, you need to understand the pros and cons of short sales.

Why? Because short sales are becoming an increasing proportion of the market.

Why? Because the market is turning around.

Sound counter intuitive? It is, I agree.

The number of short sales has increased as a portion of the entire market because the number of foreclosed properties is shrinking.

With the number of foreclosures drastically shrinking in the Phoenix real estate market and the rapid increase of short sales, those looking to buy will be forced to wait unless they decide TODAY to buy (not literally today, but in the near, and I mean very near, future).

Check out the graphs, below. In the first one you can see those two pies. Notice that the one of the left represents active listings. See the light blue area? Those are “pre-foreclosures” or “short sales.” The red area is lender owned property and the dark blue represents normal sales.

So, look at the right hand pie. These are monthly sales –those that actually close. The red area is much larger because the foreclosed properties actually close.

With the increased number of short sales on the market, a homebuyer waits an average of 3-6 months before closing the deal, and only 40% of transactions actually close.

So, what is the trade off? Not much, really. You can see the bar graph below the pies showing that prices for foreclosed homes are lower than short sales. Problem: there are fewer of them to look at.

Am I saying not to even look at short sales? Nope. Just know what the risks are. If you need to close in a hurry, don’t look at short sales. If you have a longer time horizon, then this can be a great way to find some incredible deals.

Check out the graph further below to see how the number of short sales versus foreclosed properties has changed over the course of the year.

Then give me a call and let’s talk about how I can help you.

Well, it’s been a long time in the making, but I’ve got a new website.

Now you can:

1) Find more information about Get Your PHX events.

2) More blog posts, news and analysis.

3) Log on and instantly to search the real estate market in the entire valley. There is sooooo much more power in this website!

4) Access pre-made searches for everything from historic homes to those super-cheap condos around town.

Let me elaborate on #3.

On my previous site you could see some searches, but only the criteria that I create for you. Click on “Search the Entire Valley” and you will be able to define your own searches!

I’m even opening up the blog to contributors who want to share thoughts ideas and experiences about how they “Get Their PHX”. So, have a look. Poke around.

Send me your thoughts!

Cheers,

Ken