1. If a purchase appraisal comes in high, buyers and agents can raise the price of the house and then ask for an additional credit – without having to backdate an addendum prior to the appraisal date.
Both Fannie and Freddie allow this, and, unfortunately, I was unaware of that until yesterday.
Slightly high appraisals are particularly common when purchase prices are odd numbers. For example, a home with a $597,000 purchase price will often come in at $600,000, as many appraisers round to $5,000.
In those situations, buyers might as well ask for the extra $3,000 as a closing cost credit.
2. No-Ratio/No-Income Verification Loan at 6.875%
Yesterday, I blogged about another “no-ratio/no-income” loan that required about $1.5 million in assets after close (80% loan-to-value; 7.0% rate).
Today I am blogging about another “no-ratio/no-income” loan – and it only requires about $80,000 after close of escrow and the rate is lower!
The catch? It requires 35% down (65% LTV), and the $80,000 must be in the form of a certificate of deposit with the bank that will buy the loan.
3. Reminder to Lock In Rates No Matter What the Pundits Are Saying
I have a loan officer friend who had 17 borrowers who wanted to refinance in September and wanted to float (not lock in) their rates because they heard that rates were going to fall…
They’re still waiting.
This is why we always encourage borrowers to lock in their rates as soon as possible and to ignore the pundits – as NOBODY knows what will happen with certainty, given the enormous number of variables that can move rates in either direction.
And once again – if rates fall after close, buyers can always refinance.
4. Friends Don’t Let Friends “Time the Market”
We recently had a pre-approved buyer ask if they should wait and buy when rates are lower or when home values fall.
We reminded them that with every 1% drop in rates, an additional 5 million buyers qualify for homes – and competition heats up as a result.
We also shared this blog: Why “Timing The Market” Never Works (my favorite point is the Warren Buffett quote, as he never times the market).
Also, there’s this: One of our clients recently offered $900,000 on a $787,000 listing. There were three offers over $1.1 million. Apparently nobody in that market got the memo about the “market crashing.”
Dollars to donuts too that this will be another example of where “The Appraised Value Is NOT The Market Value.”
