Financial Facts: Approved today, denied tomorrow
Having been in the mortgage profession for over 15 years I can honestly say that the marketplace is in turmoil. Underwriting guidelines are being updated, changed, added to, deleted from, and just plain revamped from top to bottom on a daily basis. I have seen more changes in Underwriting guidelines in the past twenty four months than I have seen in the past fifteen plus years. In fact, not a day goes by where I don’t receive an update from at least one of my mortgage investors with one or more guideline updates.
Now all of the changes are not all bad. In fact, many of the changes just take us back to the days where a potential mortgage borrower had to show decent credit scores and a stable financial history to qualify for a mortgage. Gone are many of the low credit score low down payment programs, and as far as I am concerned good riddance.
As an example two years ago there was no problem with the financing of a condo at the bases of any of the ski resorts. Now many mortgage investors have raised the minimum credit score requirement. They have also increased the minimum down payment required from the borrower too. In fact some mortgage investors have just quit loaning funds on any condo where as few as one condo in the complex is an advertised rental unit.
But one considering the purchase of a condo in such a complex should not run away screaming in fear. There are still mortgage investors who lend on these properties. But the investors now have tighter underwriting rules.
And for the new tougher underwriting rules they make sense in most cases throughout the nation as most markets have experienced a major downturn in property values. We in the High Country are seeing the minimal decreases in value. I attribute this to the fact that we are in a location that buyers and vacationers from all over the globe want to own and visit. Now and in the early part of this decade the appreciation of property values still occurred while most property values nationwide were stagnant.
So if you are considering the purchase of a primary home, a vacation home, or an investment property or refinancing what you already own check with your mortgage lender as soon as possible. I would bet that most all owners and buyers will not have a problem in the finance process, but the few that are questionable need to know right up front if they will qualify for a mortgage.
But keep in mind that the mortgage underwriting rules are changing constantly. So just because the mortgage application can be approved today is not guarantee that one, three, or six months from now it would also be approved. If you are considering a purchase in the not too distant future I suggest that you save as much money as possible, you make sure all your bills are paid on time. I also recommend that you meet with your lender as soon as possible to formulate a solid plan and to hear what other changes may occur prior to your formal application is made to borrow on that perfect home.
For answers to your mortgage related questions call Bob Kieber are (970) 262-1199 or email him at firstname.lastname@example.org. Bob is a local mortgage lender and principal of Resort Lending. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country.
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