Providing assistance in a challenging market

October 22, 2008

Ok, back to Real Estate.  My last entry was just something I had to get off my chest.

 

One of the things I want to discuss this month is financing.  The common perception is that home financing is difficult to obtain these days.  To be clear, it is hard to get a loan if you have a credit score of 520 or less, no money for a down payment and a debt to income ratio of greater than 50%.  Frankly, if this indicates your financial situation, I would advise you to hold off on buying a home and consider seeking out a financial counselor to help you improve your finances.

 

As a country and as individuals, we have lost sight of the importance of financial discipline and are now paying the price. This is our current reality.  Our lending criteria is, by some estimates, back to what they were in the mid ‘90s.  I was selling real estate then and we sold a lot of homes.  It is a lending criteria or discipline that we should have never ventured away from.  However, the stricter criteria still affords many people the opportunity to purchase a home.

 

A principle that was important to me as a Broker and is still one of our top company goals is facilitating home ownership.  We have always strived to build and create neighborhoods that are attainable and have lasting value.  And, we’ve worked hard to be as flexible as possible to assist our buyers in getting into our homes. Given the current financial climate we are experiencing, this has never been more important.  We have realized that the lending programs that assisted many unqualified buyers in the past have left out some much more qualified buyers today. 

 

Over the past few months, we have been researching what we can do to help those who may have the appropriate income and credit, but lack the down payment.  Or those who have the income and the down payment, but not the required credit score.  These people need assistance in the form of a financial advisor or credit repair counselor and most importantly, a Seller that understands how to help and is flexible enough to make the home buying opportunity a reality.

 

With that in mind, we have implemented the following assistance programs:

·         Marnella Homes hosts educational home buying seminars the last Wednesday of every month.

·         We allow deposits of earnest money over time so that the required down payment accrues with each deposit.

·         We have created a Lending partnership that brings financial consultation and credit management to our Buyers.

 

1)      Home Buyer Seminars.  In this climate, it is just as important for the first time home buyer, as it is for the seasoned investor, to know what is really happening in the lending world.  Every day we’re inundated with information from the news, Internet, word of mouth, etc. and it’s hard to really know what is fact or fiction.  To clear up misconceptions and educate buyers, we have been hosting these seminars 1:1 or in a group setting.  Our preferred lender from Wells Fargo provides great up-to-the-minute insight into what is happening in the market and how to overcome potential challenges.           

2)      Earnest Money Deposits.  This has been a great help for our Buyers who have the income, but not the down payment.  Especially, those who are renting.  Why continue to pay rent and pay someone else’s mortgage when you can apply that money to your own new home? We are allowing a qualified Buyer to move into one of our homes and make monthly installments of earnest money to accrue the required amount necessary to close.  Once the necessary monies are on deposit, they are able to close escrow.  All while enjoying their new community and investing in their very own home.

3)      Lending Partnership.  Wells Fargo’s partnership with us has created services that are not common in other mortgage companies.  This is a partnership that’s sole purpose is to help those who are interested in the opportunity to own a home and achieve that goal no matter how long it takes.  In most cases, if a buyer has the will, we will figure out a way.  What is now available to our buyers is a financial advisor who can map out the steps necessary to create a clear and attainable path to home ownership.  A credit manager is also on hand to help those with less than perfect credit work on cleaning it up to a score that will get them were they need to be.

 

The bottom line is that we are in this for the long haul.  Our motivation has always been to promote home ownership and assist in whatever way possible.  These are the things we are implementing now and we won’t stop here.  Because this market is ever-changing, our methods of assistance and the homes and communities that we build will change too.

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2 Responses to “Providing assistance in a challenging market”

  1. John Says:

    Thanks for the info, and as you indicate, those scores you indicate defintely should not buy! I also think you need to point out that the federal gov’t FHA and Bank of America/Countrywide have committed to helping over 800,000 homeowners between them keep their homes. I found more info on the programs here. http://www.needhelppayingbills.com under the mortgage link
    I also think the gov’t, companies, you as a neighbor, everyone needs to get the word out on ways to get help, and think the seminars you indicate can be good as well. It will benefit us all if people take advantage of it.


  2. Thanks for the information…I bookmarked your site, and I appreciate your time and effort to make your blog a success!


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