So, here's the first edition of the Centsless Times. Thanks to my friend, Sean Seidell, for the idea for the name.
Now, about this first posting (your're thinking). This is a strange way to start a blog that claims to be about financial matters. A dog and an elephant?
Well, not so fast. Let's start with Margot. She's my grand dog, and lives with my daughter Robin. She also has the perfect look; that look of irritated disbelief we all have when we read what a train wreck the mortgage lending industry is right now, thanks to Barney Frank, Chris Dodd, and the major banks. "You can't be serious" she says. We'll see more of Margot and her look.
Then there's our elephant (courtesy of Shutterstock). His name is Banks, Biggy Banks. He's the mascot for the big banks; the ones who created the mortgage mess, and then said to the timid and venal politicians (Senator Barney Mouse) "Hey, boss! Here's some more campaign funds. And don't let anyone blame me for this mess! It wasn't me! It was those wicked independent mortgage lenders. And of course, all those borrowers who should have known we were selling toxic mortgage products. So don't blame me!"
Finally, there's Charlene. She's here for the humor, but definitely not for any unwelcome information.
More on Charlene later.
Something substantive? Well, okay. How about this?
A client asked me: What's the lending climate now for someone with good credit? Do you have to have a minimum of 20-25% down? What else do you need to get financing? And how long do you have to be at your job?
The answer: The lending market is still good for borrowers with good credit. Interest rates are low and there is a large number of good properties on the market. What's difficult is the loan process itself. Not surprisingly, the federal regulators responded to the mortgage meltdown with a host of new regulations. In addition, each of the big banks piled in with their own requirements, which are layered on top of the federal scheme.
Some questioned whether the people who made the mess were the ones who should write the new rules to fix it.
And some of the new rules were helpful. But most of them were either ill concieved or else designed to drive the independent mortgage lenders out of the market. This has done great damage to the housing market and to the mortgage industry. As a result, the economy suffers.
Now, about this first posting (your're thinking). This is a strange way to start a blog that claims to be about financial matters. A dog and an elephant?
Finally, there's Charlene. She's here for the humor, but definitely not for any unwelcome information.
Something substantive? Well, okay. How about this?
A client asked me: What's the lending climate now for someone with good credit? Do you have to have a minimum of 20-25% down? What else do you need to get financing? And how long do you have to be at your job?
The answer: The lending market is still good for borrowers with good credit. Interest rates are low and there is a large number of good properties on the market. What's difficult is the loan process itself. Not surprisingly, the federal regulators responded to the mortgage meltdown with a host of new regulations. In addition, each of the big banks piled in with their own requirements, which are layered on top of the federal scheme.
Some questioned whether the people who made the mess were the ones who should write the new rules to fix it.
And some of the new rules were helpful. But most of them were either ill concieved or else designed to drive the independent mortgage lenders out of the market. This has done great damage to the housing market and to the mortgage industry. As a result, the economy suffers.
So the process of doing a loan is now immensely more complicated because there are many more questions to be asked and answered. Our processors and underwriters spend almost twice as long completing a loan as they did a few years ago.
That said, loans are still available with as little as 3% down, although any loan with less than 20% down will almost invariably require mortgage insurance. And if you’ve been at your job for two years, have good credit and enough income to qualify, then you have the basics to get a mortgage loan.
As a rule of thumb, your monthly payment for principal, interest, property taxes and insurance should be not more than 35% of your gross monthly income, although there are exceptions that will let you go up to 50%.
That's all for now, folks. Have a sunny weekend!
