One Of My Favorite Quotes
Long ago a hero of mine, T Bowering Woodbury, taught that “When the going gets tough, the tough get going.”
This is a lesson I have tried to remember, do, and appreciate in others.
I thought of that today in a different way. It hit me when I saw some not so good news about the mortage industry. We could use a turn around, a bottoming out of bad news.
However it is, the version of the quote that went through my mind today is, “When the going gets tough, The going gets tougher.”
The news? The mortgage insurance companies are tightening their underwriting standards. Great! We haven’t heard much about the mortgage insurance companies have we? Whereas in the past we have only seen them as a money hungry evil grubby premium sucking arm of the industry we now must recognize they are having their losses too.
This announced policy hurts where we need it not to hurt. The home buyer that doesn’t have 20% to put down. In the past it was almost a given, if Fannie or Freddie approve the loan, hey the M I companies will too. Not so going forward.
For you or those you care about here are some nuggets from my years of experience:
1 – This makes it even more important for first time home buyers to use a lender that is FHA approved. FHA provides an alternative to mortage insurance.
2– For home buyers that are not putting 20% down give yourselves more time in the process to get excited that the deal is done. An extra step could blow you out.
3– Verify with your local bank, such as Key Bank, your ability to use them for purchase money seconds. That is the term they use where they provide the difference in down payment to make the loan a 80% loan to the first mortgage holder. This will make the process tougher to coordinate, but this may now be your best option. B of A, U S Bank, and many credit unions have in the past offered these loans, just check. I know Sandi Collins at Key Bank, Issaquah, Gilman has helped many of my clients, that is why I mention them.
4– Do everything possible to up your credit score, bring more down payment to the table, add to your cash reserves, etc. These all add strength to the loan, strength that may be needed.
Tags: mortgage+insurance, key, issaquah
