Cindy's Blog

...that could come in handy in the current market.

1) Despite the news constantly saying the rates are going up, rates are still right between 5.5- 6%. We are definitely seeing more FHA loans, and luckily, fewer loans that are from strange, unknown lenders operating out of their cars on their cell phones. (that is definitely a good thing for all of us, even though some people may not be able to get a loan that they would have been able to get a year or so ago, but they arguable should not have been able to get it then.)

2) We are definitely seeing more FHA loans. What does that mean if you're a buyer? Slightly more paperwork, and a slightly longer processing time in most cases. Typically though, the reasons FHA loans had fallen a bit out of favor was because there were so many other options out there where folks could obtain 100% or in many cases 104% financing without having to go through the FHA process. With many of those loans gone, we're definitely seeing more FHA, since they allow a loan to be made with only 3.5% down- something many loan programs won't allow now.

What does it mean for you as a seller? Again, as with the buyer, there is a bit more paperwork. There is also an FHA appraisal, slightly different from the standard appraisal. In effect, the government, guaranteeing the loan, wants to make sure they get a solid house if the purchaser defaults on the loan and they own it. Thus, you may have negotiated the entire inspection addendum, and even made the repairs, but the appraiser can come in and ask for more repairs that must be done before the loan is out of underwriting and approved.

3) Just because the market has been soft, doesn't mean that every house can virtually be "stolen". While most sellers are in fact somewhat flexible, everyone has a different motivation, and the vast majority are not desperate.