(SAVANNAH) – Everyone’s paying more attention to economic news these days because of the recent financial meltdown. As a result, mortgage professionals say, many people are assuming money’s not available for mortgage loans. But the funds are readily available.
Lin Walsh, owner of AccuMortgage, was surprised recently to learn that people are assuming they can’t get a mortgage now.
“Until last week I didn’t know the public perception is that there’s no money to lend – that is such as misnomer,” Walsh said. “We still have all the money we had to lend. We’ve got plenty of money to lend.”
“It just appalled me – someone called me and said, ‘I didn’t think there was any money to lend,’ – and I said, ‘Yes! There is!’” AccuMortgage has in-house underwriters (the people who approve loans) who also do work in 48 states. “They’re so busy they can’t keep up,” she said.
Jeff Grossman, vice president with First Bank Mortgage, just had a client who thought he wouldn’t be able to get a mortgage, based on what family and friends were saying.
“You know how it is – everyone’s got an opinion,” Grossman said. He was able to pre-qualify the client for his mortgage within an hour of his call. Whether buying or refinancing, if the borrowers have good credit and can afford the payments they can receive approval in a few hours and have the loan in a week to 10 days, he said. The FHA loan limits have been increased and VA, Rural Development, Conventional as well as Jumbo mortgage loans are still very much available, he said.
“The only programs that have been affected are the ones that probably shouldn’t have been made available in the first place,” Grossman said. It may also be a little harder for people wanting to buy investment properties, he said.
“I think the public has been convinced by the media more than anything else” to think mortgage funds aren’t available, Grossman said.
Denise Denison, senior loan officer of Darby Bank & Trust, agrees.
“People are scared to even get pre-qualified,” Denison said. “They’re afraid they’re not going to qualify. People are just afraid to even ask. Oftentimes they’re surprised they can even get financing – because of all the media attention they think it’s not attainable.”
“The mortgage money is still available,” Denison said. “I’m still making loans. The majority are FHA.” For someone trying to buy a primary home, as opposed to investment properties, it’s not hard to get a loan, she said.
“It is absolutely a great time to buy a home with mortgage rates still historically low,” Denison said. “Now more then ever the home buyers can rest assured they are not being taken advantage of by the mortgage lender. No more steering the borrower into an exotic loan because the industry is back to common sense mortgage lending.”
Bill Stuebe, an associate broker with Celia Dunn Sotheby’s International Realty, agrees that the real estate market offers an opportunity now.
“The message the media is putting across is that there’s a total credit freeze and that there’s no money,” Stuebe said. “But for those who have good credit, now is a good time because house prices are down and lenders do have money available. It’s a great time for a deal and Savannah is a terrific place to take advantage of the current opportunities. Savannah is unique– there’s no place like it in the world and real estate values will reflect Savannah’s unique qualities as economic conditions stabilize. It’s a great tim e to take advantage of low prices and purchase a home.”
People should talk with a mortgage professional before they sell their house and certainly before they start looking at houses to buy, said Walsh of AccuMortgage. Lenders and borrowers need to think about what borrowers are realistically able to do and should do. “People have to be realistic about what they can sell their house for and what loan they qualify for.”
“It’s about knowing the industry and knowing your customer, putting them in the right position to pay for their home,” Walsh said.
“You don’t have to have top of the line credit,” said Walsh, who’s been in the mortgage field for 25 years. “I think people are frightened because they don’t think there is money readily available, so they’re too hesitant to get with a mortgage professional and ask. All of the sub-prime money that was out there is gone and people are under the impression since that’s gone that there is no money, and that’s wrong. The money is there. … We even have 100 percent loans.”
“The approval process is just like it always has been for a normal loan,” Walsh said, with lenders looking at debt-to-income ratio, assets and liabilities, and needing documentation about bank accounts and income for someone to qualify for a mortgage.
“We’re just going back to what was normal,” Walsh said. “We’ve got to get in control of the money we’re lending. These guidelines were in place even when money was flying around.”
“If more mortgage brokers had been more conscious of the borrowers’ wants, needs and abilities, that would have helped curb this crisis,” Walsh said. “There was a big lack of ethics. It’s caused a very incorrect market. There was too much money loaned under the wrong guidelines.”
“There were a lot of unethical people who made a lot of money and got us in this mess,” Walsh said. “The wrong people were selling the wrong money to people who didn’t know the difference.”
“Just because you’re breathing they’re not giving you money any more,” Walsh said. “That went on for a while.”
People need adequate credit scores, a tax return and the ability to repay the loan, Denison said. For people who might not be in position to buy a house immediately, she coaches them on what they need to do, such as improving their credit score, so they’re ready in six months or a year.
“The lending industry has gone back to common-sense lending,” Denison said. “The lending industry, Fannie and Freddie, got away from common sense.” Darby did not participate in sub-prime lending, Denison said.
“It’s not my goal to put them in a house that they can’t even afford to go out to dinner with their family,” Denison said. In 2007, people with excellent credit scores could get loans exceeding 50 percent of their gross income from other institutions. But as gas, groceries and other expenses go up, that size loan becomes more impossible to handle.
“I feel like someone who gets a loan here to buy a house is my neighbor,” Denison said. “I want to feel good about it. I don’t want them lying in bed thinking about how they’re going to pay their mortgage.”
Kay Ford, president of SunTrust Savannah, has been in banking for 35 years. SunTrust Bank is still in the business of lending money as well as many other financial products and services.
“There is money available for residential and commercial mortgages,” Ford said, as well as consumer loans.
“The media is full of negative financial news,” Ford said. “It’s con
stantly in the forefront of everyone’s mind. People are waiting – is this the bottom of the market? And who knows.”
Nancy Krembs, a sales associate with Celia Dunn Sotheby’s International Realty, said Savannah has some advantages over other areas of the country in terms of its economy and its real estate market.
“We’ve got things that are going to help cushion us” such as the port, new and solid industries and companies, and being a destination, Krembs said. “Our economy is much better in many ways.”
“All real estate markets are local – our local market is in much better condition” than some other areas of the country, Krembs said. But it does offer great opportunities for buyers.
“This is really the time to buy a house,” Krembs said. “Interest rates are low. There are lots of good buys out there. People need to be aware … if you’ve got good credit, you don’t even have to have perfect credit, you can still buy a house for five percent down.”
Known for its tradition of integrity, Celia Dunn Sotheby’s International Realty specializes in residential and commercial properties in Savannah and the Low Country of Georgia and South Carolina. Founded in 1981, Celia Dunn Sotheby’s International Realty is noted for outstanding service to its clients, thorough knowledge of Savannah and the South Carolina Low Country, and excellent staff, in addition to having one of the region’s top property management departments. The owners are natives of Savannah who have more than 60 years’ combined experience in real estate. The offices are locate d at 9, 13, and 17 West Charlton Street on Madison Square in Savannah and 6 Bruin Street in Bluffton, S.C.
For more information, call Celia Dunn Sotheby’s International Realty at (912) 234-3323 or visit www.celiadunnsir.com. To contact the Bluffton office, call (843) 836-3900.