| Well, you are not alone. The lending guidelines have | | | | something in the HOA documents that doesn't meet or |
| become so strict, it feels like the banks do not even | | | | fit in the guidelines. But, it is hard to avoid that situation |
| want to make loans. Even well qualified buyers are | | | | becuase you never really know what an underwriter |
| being put to the test; buyers with high FICO scores, | | | | will think of the HOA documents, unless there is a big |
| good assets, good income, etc. Times are just | | | | red flag like the development is in litigation or something |
| different in this market and what I have learned over | | | | to that effect. Most lenders do not want to lend on a |
| the past few months more than anything when it | | | | HOA that is in litigation, so most buyers don't even |
| comes to getting a home loan, is that it requires a LOT | | | | bother buying a home in a HOA community that is |
| of patience and more time than usual. | | | | currently in litigation. |
| Lenders are requiring more paperwork, more time to | | | | The moral of the story is that in these chaotic lending |
| review loans for approval, very secure income, more | | | | times, it is VERY important to work with a well |
| reserves, higher level of assets, and more scrutiny and | | | | qualified and experienced mortgage person who has |
| careful consideration when an HOA is involved. The | | | | been in the business for a long time and has been |
| underwriters are being much more careful about | | | | through these kinds of cycles before. And, it is |
| reviewing all the information that is provided to them | | | | important to sit down with your mortgage person and |
| and making sure to dot all their i's and cross their t's, | | | | get all the information that they need you to provide |
| especially if a buyer has less than 20% as a down | | | | upfront. The mortgage person should go through all the |
| payment for a principle residence. | | | | information with you and review all the documentation |
| If you want to buy a home, the first step is to get a | | | | and look for any red flags that may come up and talk |
| preapproval from a lender, however, with what I have | | | | about those things upfront. And, if possible, you should |
| run into lately, even with preapproved buyers, is truly | | | | be fully approved subject to finding a home, knowing all |
| that you should really be fully approved for the loan | | | | the conditions you need to meet to get the loan before |
| subject to finding a home, including knowing all the | | | | you go into contract on a home. If there are issues |
| conditions you need to provide to get the loan, before | | | | that need to be addressed, it should be addressed |
| you find a home you want to buy. Typically, lenders will | | | | before you go into contract on a home. Otherwise, the |
| only provide preapproval loans that haven't officially | | | | process is stressful and you will constantly be trying to |
| gone to an underwriter for review, since the | | | | "catch up" and jump through hoops to get it done, |
| underwriters typically only look at the loan packages | | | | which is no fun at all for any of the people involved. |
| once the buyer finds a home and is in contract. | | | | Also, do not try to "get away" with ANYTHING or |
| But, in reality, a loan condition can actually be a deal | | | | think that you don't need to tell your mortgage person |
| breaker if a borrower can not meet that condition the | | | | EVERYTHING about your financial situation. Trust me, |
| underwriter needs to fulfill the requirement for the loan. | | | | if you try to avoid disclosing information and such, it will |
| So, it is better to know if a borrower can even follow | | | | most likely come back to bite you at the wrong time |
| through with all the conditions and such before they | | | | and could cost you the loan. And, if you are in contract |
| even enter into a contract on a home they want to | | | | at the time, it will cost you the home you want to buy |
| buy. | | | | and possibly your deposit. If you are working with a |
| My suggestion for any buyer who wants to buy a | | | | good mortgage person, you need to tell them |
| home is to really sit down with the mortgage broker | | | | everything and they know what to do with the |
| and find out ALL of the paperwork that you need to | | | | information you provide and will properly package your |
| provide and truly have that loan approved subject to | | | | loan accordingly. |
| finding the actual home. If you are truly approved for a | | | | Also, keep in mind that right now with the interest rates |
| loan with all the conditions and such, when you enter | | | | so great, the staff is working on WAY more loans |
| into a contract on a home, your transaction will be | | | | with WAY less people. There have been a lot of |
| much smoother and little to no stress. | | | | layoffs in the lending industry and the staff is working |
| If you are buying a condo or townhome, typically the | | | | on a skelton crew, so to speak. Less people are |
| loan will be subject to the HOA documents and for | | | | working on more loans, so you can imagine how much |
| that situation, sometimes things will come up that are | | | | time it may take to get through the workload. |
| completely unforeseen if the underwriter reads | | | | |