Basic Mortgage Information Every Real Estate Professional Should Know!

By
Real Estate Agent with Better Homes Realty - BH Referral Associates

Are you well versed in mortgages?  You should be, the mindset "Its not my job man" really has changed! If you want customers...you have to know your business.  Even if mortgages are not your level of expertise, don't you think your customers will benefit by what you know?

 

Recently there have been many issues that have come up across the nation...issues that need to made public...issues that if the customer understood in advance...issues that would not cost a professional....their time, there energy and their reputation. 

In most instances more transactions would close because of the better understanding of the entire process, while other's would never get started because these buyer's would in fact not be buyer's due to the new guidelines.

I am not that different from a consumer...some of the language is just over my head.  When it comes to mortgages...

I need it broken down for me...broken down in the language that I understand, a language consumers would understand.

Recently FannieMae changed some guidelines...it's not just our market...it's the "DECLINING" Markets..

Fannie Mae Definition of a declining market:  A declining market is one in which home pricesare currently declining, as determined by the tracking of home prices in a certain geographic location. 

This is determined by zip code through the Declining Market Indicator tool.

 

When a property is identified, a 5% loan to value (LTV) reduction is required from the maximum financing allowed per the applicable product. 

All conforming conventional and jumbo mortgage products apply.

So if someone qualifies for 100% financing and its in a declining market based on zip code...it is no longer 100% financing as the buyer will in fact have to put a 5% down payment. 

It can affect investment properties as well as primary residence's increasing the down payment to an additional 5%. 

If the zip code does not indicate the property is in a declining market but the appraisal states declining market...these guidelines will apply.

It makes perfect sense as a Real Estate Professional to understand the basic mortgage information

We have to speak the language of the consumer...so they understand! 

So go back call your loan officer's get an education...help yourself...help the consumer!

If you would like to know if you are in a declining market based onFannieMae guidelines contact your Mortgage Professional...also there is great information for all on www.efanniemae.com.

P.S.  FHA and VA loans are not affected by the declining market policy.

Disclaimer: The opinions expressed by The Activerain Network and it's members and those providing comments are theirs alone, and do not reflect the opinions of Midori Miller and CENTURY 21 Sundance Realty. Midori Miller and CENTURY21 Sundance Realty are not responsible for the accuracy or content provided by The Community.

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Rainer
103,854
Karen Luke
Henry County Real Estate
South Metro Property Management, LLC

This post could go down in every realtor's book about what they didn't learn in real estate school. Thanks Midori.

April 23, 2008 12:19 PM
Rainmaker
205,771
John Thomas
First Time Home Buyer Expert
Primary Residential Mortgage Inc.

It Shocks me how many agents show buyers home and they don't even have a pre-approval letter from the buyer.  I had an agent send someone to me who wanted to buy a $900,000 home and only wanted to spend about $1200 a month on the mortgage and had $30,000 to put down.  Why didn't the realtor say there is no way that is going to happen, it is basic math.  The taxes were $12,000 a year!

John Thomas - Certified Mortgage Planner

May 03, 2008 08:38 AM
Rainer
9,756
Simon Rosenzweig
Real Estate and Marketing

At the center of every residential real estate transaction is an individual or a family that is emotionally charged-excited, probably a bit nervous and definitely stressed about timing. 

Whether you're an attorney, a lender or a home buyer, the last thing you need is an unexpected delay at closing.
 
When you choose Madison Title you can be sure that we will process the title work correctly and as quickly as possible. That's our contribution to a smooth, timely closing.

What's more, we work with you, answer all your questions and walk you through the process. So there are no last-minute surprises at closing.

 If you're a home buyer looking for more information about title insurance, feel free to email me at srosensweig@madisonspecs.com or you can visit our website at www.madisontitle.com

Take the step, to a stress free closing.

I am here for you.

Simon Rosenzwieg

June 12, 2008 10:38 AM
Ambassador
513,247
Cindy Marchant
"in Indy" , Realtor, Fishers Real Estate
Keller Williams Indy NE 317-290-7775 www.marchantteam.com

I'm quite late in responding, but think your post is so relevant right now.  I have seen so much more FHA, specifically Ameridream options being used as the sub prime market has disappeared.  There are still good buyers out there that have had some bad luck with job loss or medical issues that are stable but can't qualify for a conventional loan.  My lenders have been FHA savvy so I appreciate their guidance with these types of buyers. 

Your post makes me think about the declining markets, the declining S & P, the rising gas prices....all of it makes for a rough time ahead.  I'm sure there will be a quite a fall out of real estate agents as a result and the strong will survive.  Here's to seeing all of you on the other side!

July 06, 2008 01:38 PM
Rainer
73,912
Sarah Eubanks
Preferred Oregon Loan Consultant & Notary Public
Hill Valley Financial Services

Midori,

As a mortgage professional, I would love to educate the Realtors in y area on the changes and the overall state of home financing. 

I would also like to learn more about the side that Realtors are working with in the current market.  The more knowledge we have the better we can all be!

Thanks for the post...

July 30, 2008 11:20 PM
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Midori Miller

Homes In Fort Lauderdale, Real Estate Training - R
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