Wow.. what a week last week was for the mortgage industry. One of LI's biggest firms went belly up. leaving a lot of people who were at the closing table suddently without the money promised to close and left a lot of people scrambling for new mortgage commitments and pre-approvals. As a result, the stock market took a little nose dive there, as investors were worried once again.

But, what is going on in the mortgage industry and what is the buzz among the mortgage agents out there. Well, from a meeting today I can tell you and give you some insight and pass what they told us agents on to you , the general public.  And so I'm blogging about it.

For one, all the lenders out there are once again tightening their ropes on who they give mortgages too and how much they will finance.  WAMU, one of the nations biggest companies, have recently reset their guidlines and will only finance 65% of a mortgage! Ouch!! But, there are other lenders out there that will finance 80%.  90 even 100% is still available, however your FICO score better be way up there.

If you were given a pre-approval for a 90% value to ratio, go back to your broker/lender and check to make sure that a) you still qualify and b) the rate you locked is still locked.  What's been happening is that people who have been approved for 90% with a rate locked in have found, at the closing table, that their rate is up by 1%. Why?  Well if the market prices of homes continues to decrease , then although 90% of it's value isbeing financed today.. 6 months down the line it could be more like 95 or or even 100%. So, lenders are still willing to finance you, but to make up the difference and the "extra risk" they raise the rate 1%.

Bottom line for both buyers and seller is this;  if you have a pre-approval or a closing coming up..check and reverify that everything is as it was when the deal was first put together (cause as we know in NY it takes 3 months to close and a lot of things in the mortgage industry change fast these days). 

Also.. for buyers.. it's a VERY good time for you to buy. Why?  Well,it's rare for both prices AND interest rates to both be down (typically prices go down and interest rates go up.. not happening as rates are staying the same). And.. some good news for both buyers and sellers.. historically when an election is coming up interest rates tend to go DOWN.. this is good for buyers because money will still be "cheap" and good for sellers because that can open the door for more potential buyers to pruchase your house.

Check back later when I talk aobut the effect and buzz among the agents about the market!