Financing First (And Following Distress)

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Financing First.

Financing is the first thing to investigate in real estate, primarily because offers aren’t considered “legit” anymore, unless they’re accompanied by a pre-approval letter. Besides being pre-approved, talking to a lender early helps you uncover what you can afford, based on the estimated mortgage payment for a given price.

As a recent case study demonstrated, interest rates significantly affect payments can be a true dealmaker or breaker. A 1.25% difference in interest rates practically equalized the monthly payment for a home that was 14% (or $22,000) more expensive, as shown in my payment breakdown chart at http://fosterboise.com/know-your-market-piti-party. If prices are low but rising, and interest rates are great, all indicators point to “buy now.”

Give Me Some Credit, Man.

But, is financing feasible? Good members of our local Boise community have endured some hard hits to previously spotless credit or been part of the massive numbers of distressed sales we’ve seen (that are thankfully decreasing at last as we depicted last week insert link to distressed inventory downturn here that opens in a new window. Be sure to tag link appropriately as internal links are a huge SEO booster). The rest of this blog is for you.

“Tons of people are on the borderline right now, who may not realize they could get qualified,” divulges Dave Rusk, at Idaho Central Credit Union (ICCU), a lender who has proven worthy of my referrals. Low down payment options also tend to surprise his clients –as low as zero.

Shana Foster Moore, Local Boise Real Estate Professional, www.FosterBoise.com, and data from eFannieMae.com.
Source: FosterBoise.com

Waiting Periods After Distress.

Post-short sale purchases are on the rise. “I’ve definitely seen more this year than last year. More and more, people are asking “when can I get in?” Rusk reports.

I dug up the chart below to reveal Fannie Mae’s answer to that question. It didn’t appear to be a document prepared for public consumption, and isn’t high-quality resolution, so this is one chart that I won’t caption with a source. http://bit.ly/LoanTiming.

Notice that 3 years after short sales, FHA loans open the real estate market back up to borrowers. It could be sooner in conventional loans with 20% down or if extenuating circumstances (medical illnesses or death) caused the short sale.

real estate foreclosures, distressed sales, boise, idaho, real estate, seasoning periods

Boise Market Indicators

I would speculate that the number of buyers will increase as the market opens back up for the people who have had a “significant derogatory credit event,” as Fannie Mae calls it.

Rusk agrees. “There’s a lot (of formerly distressed, future buyers) out there that we can see. I’m sure we’ll start hearing a lot more from all those people who are ineligible to buy now, as those timeframes start getting close.”

So while the number of distressed home sales are decreasing, the number of loans being issued to post-distressed market survivors is increasing. I’d speculate that this could help sustain that double-digit increase in home values we’ve been experiencing. FINALLY, some appreciation! I’ve been waiting for this for years and would love to help you experience it through a purchase or a sale consultation– call me.

Thank you for all the appreciation you’ve shown me, simply by reading! Sincerely,

Shana Foster Moore,
Your Local Boise Real Estate Professional

2 Responses to “Financing First (And Following Distress)”

  1. Foster Boise Local Real Estate Blog » Blog Archive » Unlock the Real Estate Market Says:

    [...] that we’ve addressed that the true first step is getting a pre-approval letter and that interest makes it a favorable time to buy or sell, now is the time to start watching for [...]

  2. Foster Boise Local Real Estate Blog » Blog Archive » Boise Real Estate Says:

    [...] With a few years between us and the big crash, many people are closer than they may think to being “approvable.” As spring approaches, don’t write-off your ability to buy until you’ve verified your options. My previous blog entry also reveals some of the waiting periods following issues with distressed properties. http://fosterboise.com/financing-first-and-following-distress [...]

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