That’s right. If you’ve had your eye on the perfect Sea Isle get-away, but put off purchasing because you think mortgages are difficult to obtain, go ahead and take the plunge. Despite all the press accounts of an industry in crisis, if you’re a qualified borrower and choose the right lender, there’s plenty of mortgage money available.

What does the investor market have to do with getting a mortgage?

Typically, mortgage lenders sell their loans in the secondary market to generate money to fund new loans. If a loan becomes delinquent, the investor may ask the Lender to buy back the loan. However, if the lender lacks the capital to do so, the problems start. With delinquencies in some areas of the country rising, many investors have backed off purchasing loans, leaving mainly government agencies like Fannie Mae and Freddie Mac willing to purchase mortgages, and then, only if they are within the ‘conforming’ limit of $417,000.

What if you need a mortgage greater than $417,000?

That’s called a ‘non-conforming’ or ‘jumbo’ loan, and they are still readily available. There are mortgage companies and banks that don’t rely on investors to purchase their loans. Therefore, a customer with good credit, the necessary down-payment, income and reserves, will easily qualify for a jumbo loan.

My best advice is to choose a Lender carefully by researching their financial stability. Once you decide on a lender, make sure you fully understand the terms of the loan product you choose. Make sure it fits your needs and comfort zone.

What constitutes the right lender?

Liquidity and the ability to generate it. Most of the mortgage lenders that have failed or are currently in crisis made questionable loans in the past; and as a result, do not have the liquidity to continue lending. With solid lending practices and financial backing many mortgage companies experienced no disruption in lending because they were not dependent on investors in the secondary market to purchase its loans.

Don’t let the headlines scare you. Reliable financing is available to purchase your dream home. Rates are very good and homes are priced to sell. Happy house hunting!

 

Andrew Fasy

Broker/Owner

NJ Realty, Inc