Not In Kansas Anymore!

I recently had the full experience of the new Fannie/Freddie underwriting guidelines for a self-employed borrower. It wasn’t pretty. A long story short, if you are self-employed be prepared to provide back up for any entry on your tax returns outside of normal business income. Most of the firms I deal with are underwriting to the strict new rules and are unable to use any discretion in what is asked for in qualifying borrowers.
I’m certain that everyone else is as sick and tired of the financial fiasco and disaster headlines as I am. So, here is a bit of bright news. The California Association of Realtors predicts that home sales will rise in California next year. No doubt fueled by the banks selling their foreclosed properties, the fact that sales are expected to rise will help clear that inventory off the market. As those homes are sold and foreclosures slow down, we should finally see some stabilization in the market. Currently, if you are able to fully document your income (and when I say fully, it is far more in depth than ever before!), there are some tremendous buys out there. Interest rates are hovering around the 6% range for 30 year fixed which may make that move-up/investment/retirement/vacation property a “do-able” thing now. 5 years from now, you may very well be congratulating yourself on how smart you were. Just be prepared to lay bare your soul, and remember through the ordeal, when it was easy everyone was doing it. Now it is not easy, but the rewards may also be bigger than before.
Remember that the higher “jumbo/agency” loan limits of $729,000 are scheduled to expire at the end of the year.
Fixed rates for conforming loans under $417,000 as of 10/23/08 (a.m.) are:
(Rates quoted are for 0 point loans, call for lower rates and higher points)
30 year fixed: 6% (APR 6.07%) payments are $2,500.13/mo.
15 year fixed: 5.75% (APR 5.87%) payments are $3,462.81/mo.

Posted by bruce at October 23, 2008 12:25 PM