The SF Chronicle came out with article today about the mortgage crunch and its impact on the Bay Area. Things are changing rapidly in the mortgage market and some people are panicking.
So are are we in a crisis? It is a wild ride and the market is probably going to be a little shaky for the next few weeks as the dust settles from it. If you are buying or refinancing now, here are a few tips to help you through:
1. Find a mortgage broker you trust who can help you navigate the process. (Not a bank, a broker!) Don't skimp on fees right now and don't find your lender online. Hire someone honest and reputable and highly recommended. Your real estate agent should be able to recommend someone to you who can guide you through the tricky mortgage process. Work with someone local to the area in which you are purchasing!
2. Great pre-approved now, even if you are not ready to purchase. Your broker may be able to make suggestions on things you can do today to get a better rate tomorrow.
3. Work with your mortgage broker to improve your credit score. Lenders are looking at credit scores very closely. A lower credit score means a higher interest rate. Even if you already have a good score, see if you can make it better.
4. If you are putting down less than 20%, be particularly cautious. These loans with a higher loan to value ratio are much more difficult to get right now.
5. Don't panic! Work with experienced professionals who can guide you through the process safely.
I can't stress enough how important it is to work with someone honest and reputable. Good brokers have established relationships and preferred rates which can be as much as a full percentage point below some of the big lenders like Washington Mutual and Wells Fargo. For more information about what exactly is happening in the mortgage industry, see my post: "Is the sky falling on Marin County real estate."
Ginger Wilcox is a residential real estate agent with Pacific Union in Marin County, CA. For more information, visit Ginger’s Marin Real Estate Blog.