Rates are slashed to 4.5% rate on 30-year fixed

This just in from Greg Long of FirstCal Mortgage:

Hi Guys:

Rates have been on a great run lately and we are quoting 4.5% rates on 30 year and less than 4% on 15 year fixed rates.

If you are buying a home or need a mortgage check up to see how much you could save on a new mortgage, please touch base right away while these great rates last.

 See this short video for a market update:

http://screencast.com/t/GRVU7NCjw

Greg Long
Area Sales Manager
glong@firstcal.net

NLMS# 239857
Cell: 970.846.3344
Fax: 877.841.3035

Show Your Lender Your Money!

This just in from one of our local lenders:

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Did You Know that we may have to ask for additional documentation from your buyers?

 It has always been a requirement for us to provide two month’s bank statements to document assets and reserves, but our job doesn’t end there. The underwriter reviews the bank statements thoroughly and if there are any unusual or large deposits, we are required to get a copy of the deposit in addition to providing an explanation. Why would we have to do this? Lenders have to be sure the buyer is not receiving money from the seller, real estate agents, or even from a loan that hasn’t been disclosed.

It is never a bad idea to ask your client where the down payment is coming from so that you can better estimate the loan conditions deadline. Also, the more information that we have upfront, the faster the process will go.

As always, please call us with any questions.

Kathryn Pedersen and Holly Rogers

Mortgage Lenders
Yampa Valley Bank
Genuine Hometown Banking
Direct Line – 970.875.1609

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How does where the downpayment money is coming from affect the loan conditions deadline?  The loan conditions deadline is one of the deadline dates in the contract. The buyer, along with the buyer’s agent, chooses this deadline date and it’s the date by which the buyer is pretty sure their loan will have gone through the entire underwriting process.

If someone has their downpayment money already sitting in an easily accessible account, that’s one thing. But if they have to withdraw the downpayment funds from their 401K that alone can take up to three weeks. If the downpayment money is coming as a gift from the buyer’s parents, the buyer’s parents’ bank statements will be scrutinized just as closely as the buyers’, to see where their money came from. And if the money is coming from another bank, it may take awhile for the check to clear from the originiating bank.

Lenders like to have 45 days to process the loan and so they like to see Loan conditions Deadline to be 45 days out from getting under contract, but in some instances they are able to get it down within 30 days if there aren’t these sorts of hold ups.

A client of mine that closed on his Steamboat town house a couple of weeks ago (he used a different lender) and he was not happy with the amount of documention he had to provide. His wife travels a lot for her work and is constantly being reimbursed for her travel expenses. All of those deposits apparently needed to be backed up with all her Expense Reports, he said sometimes for amounts as little as $58.00.

Blogging Goes Mobile!

Who says that just playing around with your smartphone is a waste of time?

The internet IS amazing – how one thing can lead to another, and another and another. Sometimes I’ll start in one direction and it isn’t till the end of the day when I’m closing down all of the windows on my computer that I’ll find myself back to the original window and task I started on (and still hadn’t completed!).

With my Android phone I’m limited in the number of windows I can have open, and my typing is exclusively done by my thumb. But between emails and newsletters and Facebook updates from the numerous friends and business pages I follow, with all their associated links, my phone is a gateway to a world of stumbled-upon information.

Tonight’s stumbled-upon discovery portends to be a significant one. While searching in the Android app market for a q-code reader so I could read something someone posted on Facebook, I found this nifty app (or is it a widget?) which allows me to access and post to my Word Press blog. So I’m using it right now to write this blog, with my thumb, while I sit on the couch with my 18 year old son, who’s also on his computer. We have a fire going in the fireplace as it’s raining or snowing outside (your pick).

I’m excited by my find – by my newfound ability to blog from my phone. Just like my phone has allowed me to take a lot more pictures than I ever have, and the Facebook widget has allowed me to so easily stay connected and informed, and my bank’s widget allows my thumb to transfer money to my don’s debit card as he needs it, I trust that this will make it more likely that I’ll blog.

Assuming of course that it works. And if you are seeing this, then it did, and I’m going to call it a miracle. Yep, just another of these crazy miracles…of technology.

HomePath program helps pay closing costs

This just came in to my inbox:

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Fannie Mae offers 3.5% Buyer Assistance on HomePath Properties

Fannie Mae wants to help more buyers afford to purchase their new home. That is why we are offering up to 3.5% in closing cost assistance for HomePath® properties beginning April 11 through June 30, 2011.

Eligibility Details

• Initial offers must be submitted on or after April 11, 2011.
• Buyers must be owner occupants (i.e., the home will be their primary residence), and buyers are required to sign an Owner Occupant Certification Rider to the Purchase Addendum with all initial offer submissions.
• Sale must close on or before June 30, 2011.
• Other restrictions apply. For more information about the offer including the terms and conditions, visit the Special Offers tab at HomePath.com.

HomePath.com

Search HomePath.com today for the most updated list of properties. And remember, all owner occupants enjoy a 15-day preview of all HomePath properties — without competition from investors — through Fannie Mae’s FirstLookTM period.

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HomePath does seem to be a good program. They also typically only require a low downpayment. 3-3.5% I believe. Let me know if you’d like me to run a search to see if there are any HomePath homes in the Steamboat Springs CO area you might be interested in.

Wells Fargo Home Mortgage Plays White Knight in Steamboat Springs

Part II of II part blog on Condo financing in Steamboat Springs Colorado.

Read Part I: The Google Factor and other Toxins that hurt Condo Financing in Steamboat Springs

As I mentioned in Part I of this series, Wells Fargo Home Mortgage is currently lending on most (not quite all, but most) condos in Steamboat Springs. Wells Fargo is the White Knight, charging in, so to speak, to prevent what could otherwise be a vary dire lending situation within the condominium market in Steamboat Springs Colorado.

I spoke to Lynn Reiff at Wells Fargo, who sent me the following information. You’ll note that their “Resort Condo” is what most lenders are currently calling Condo-tels (and not lending on) and that their definition of Condotel is something else entirely: 

 WF classifies condos as either REGULAR, RESORT or CONDOTEL.

Villas at Walton Creek - Regular Condo

•  REGULAR condos would include Sunray, Quail Run, Villas at Walton Creek, The Pines, etc.  These do not have front desks. On those purchased as a primary home Wells Fargo has been able to lend up to 90% of loan-to-value (meaning 10% of the total price of the condo needs to paid by the borrower as a downpayment at closing; 90% of the total purchase price can be financed), making these “regular condos” much more affordable, lending-wise, than “resort condos” below.  Second homes may go to 80% LTV (with the conventional 20% downpayment amount), but get better rates at 75% LTV (with a 25% downpayment).  Both fixed and adjustable rates are available.

Trappeurs Crossing - Resort Condo

• RESORT condos would include Trappeur’s Crossing, The Ranch, Canyon Creek, Eagle Ridge Lodge, The Lodge at Steamboat,  Timber Run, etc.  These do have a front desk. They require a minimum of 30% down (70% LTV) and have additional requirements: the borrower needs to have the equivalent of 20% of the loan amount in liquid assets like cash after closing, and the borrower has to set up an automatic debit from a Wells Fargo checking acct for the monthly mortgage payment to be paid from.  So, for example, if the purchase price is $400,000 the borrower would need to put  $120,000 (30%) as downpayment and could borrower the remaining $280,000 (70%). Additionally,  they would need to have another $80,000 in liquid assets like cash stashed away in an account somewhere. So basically, the borrower would need to have the equivalent of 50% of the purchase price available to them in cash to be able to borrow the other 50%. this doesn’t make it easy for the average person to buy a resort condo in Steamboat, but at least it makes it doable for the person that can come up with 50% cash, which is better than the only buyers being those that can pay 100% cash! Wells Fargo offers both 30 year fixed rates as well as Adjustable Rates for this classification of condo.

Torian Plum - Condotel

• CONDOTEL – Torian Plum at the base of the ski area is an example.  These are condos that have commercial space in the building. They currently have no financing for these.

New Construction Condos 

• Yes, if 70% presold. Many of the projects were 70% presold, but have since “fallen out” of the 70% bracket, by buyers not closing on those initial contracts.  This would include First Tracks.  They cannot currently lend there.

The Olympian - New Construction

•    Yes, if Wells Fargo holds the Construction Note. Where Wells Fargo Bank has been involved with the construction loan (the downtown Condotels TheVictoria and The Olympian) they do have Portfolio money available for loans, which means they are able to lend money from their own in-house funds.  They are not offering fixed rates on these, only 3/1 and 5/1 adjustable rates.

Getting a mortgage to buy a condominium in Steamboat Springs definately isn’t as easy as it used to be, but as long as buyers and sellers are knowledgeable  and realistic about what is and is not possible, the market moves forward and begins to pick up traction, with a certain white knight leading the charge.

The Google Factor and other toxins that hurt Condo financing in Steamboat Springs

Part I of a II part series on The Condo/Hotel financing challenge in Steamboat Springs Colorado:

Greetings Susana,

 A quick question for you: One of our Homeowner’s Association board members, of our Steamboat Springs Colorado condominium saw that our condos were listed as a Condo/Hotel,  and we know that this makes it hard for someone to buy or sell a condominium in Steamboat Springs. Do you know what  we can do to get that listing changed? Who do we have to contact or what?

Thanks.  BG 

Hi BG,

You had a quick question and I have a long answer… so bear with me.

First off, was there an actual place that the board member saw it “listed” as a hotel/condo? If there was, that would give me more information to go on.

There is no universal Condo/Hotel list

Otherwise, to my knowledge there is no actual Universal List that ALL lenders refer to. Individual lenders may have created their own lists.

Underwriters look at the HOA Query Letter

How the lenders arrive at that information is via the Homeowners Association Query Letter (it has some other technical name) that is sent out to the HOA manager to be filled out as part of the lender’s underwriting process. One of the questions is whether there is a front desk. Another is whether nightly rentals are allowed. Having a front desk may lead to the classification of Hotel/Condo by that lender. For other lenders, allowing nightly rentals in the complex may also lead to that classification. Some lenders have gone so far as to Google the complex’s name to see if they could book a nightly rental in the complex. If it comes up on Google as a nightly rental possibility they classify it as a Condo/Tel.

Selling condo mortgages on the secondary market is problematic 

The problem with the condo/tels, as far as lenders are concerned is that the lenders (especially in the case of lenders via Mortgage Brokers) are unable to sell the mortgage on the secondary market. Fannie Mae is now the biggest buyer of mortgages on the secondary market and they believe (wrongly, we believe with regards to the ski resort market) that condo/tels are a greater risk.

Wells Fargo is Lending 

Locally, Wells Fargo, for one, is lending on projects we normally would think of as condo/tels ( front desk, nightly rentals which are strongly marketed to Steamboat Springs’ visitors, shuttle service, etc.). They lent on a unit at The Lodge, a condominium complex across the street from the Gondola at the Mt. Werner ski area, for a client of mine recently and The Lodge is a full blown condo-tel. Wells Fargo actually has its own classification system, and set of requirements which I’ll get into in detail in Part II. My client had to put more money down than the conventional 20% - 30% I believe – and there were a few more requirements, but nothing major. And he still got a good rate.

The Google Factor

The lending market has been a constantly moving target since the start of the recession. A buyer now a days will have a harder time getting lending on just about any condo in town (mostly because most condo complexes in Steamboat have at least one unit that is available for nightly rental when Googled, and condos nationally still have the reputation of being located mostly in resort areas) versus a townhome. It is a sad fact, which the National Association of Realtors is currently fighting in Congress.

HOA dues delinquency rate means death to loans 

The other thing that makes it difficult to get lending on a condo project is if there is greater than a 15% delinquency on HOA dues by the homeowners. Your condominium development, as far as I know, doesn’t have this problem. A few other condo projects, especially those with a lot of foreclosures and short sales, do have this problem. It’s another one of the questions that is asked in the HOA Query letter by the underwriters, and if the “Yes” box is checked, you can pretty much forget getting a loan on a condo in that complex. 

 Bottomline:

It is harder to get lending on condos in Steamboat than on townhomes or single family homes, period. But especially if there are any units being rented out on a nightly rental basis.  It is harder still if you have an onsite front desk (which yours does not) and almost impossible if there is a greater than 15% delinquency in HOA dues (which I believe yours does not). A buyer may have to put more money down than the standard 20% , may have to meet a few other requirements, and may have to pay a slightly elevated interest rate on the mortgage to buy a condo in Steamboat, but that’s about it.

Sunray Meadows in Steamboat Springs changed their bylaws last year to prohibit nightly rentals, just to avoid this condo/tel lending problem. But it was later overturned by the Homeowners who were trying to sell their condos, with the argument that NOT being allowed to rent their condos on a nightly basis was discouraging buyers who wanted the nightly income! Go figure!

Go to Part II: Wells Fargo offers condominium lending in Steamboat

Outgrowning Steamboat’s Winter Carnival? Never!

On our dining room wall we have a print of a painting. The view is looking up Steamboat’s main street straight at Mt. Werner’s ski slopes. In the foreground the street is covered with snow and a crowd of people stand in front of FM Light, Allens, Chief Theater watching as a horse pulls a child on skiis up and over a small jump. Do you know what this is a picture of? A horse, rider and skier participating in the Donkey Jump, one of the several street events that goes on during Steamboat Springs’ Winter Carnival.

On our living room wall we have a photo of our own son, caught in mid-air as he too participated in the Donkey Jump years ago. And I’m sure ours is not the only home in Steamboat to have such a picture on their wall or at least in their treasured collections, because the Winter Carnival with its crazy mix of street events, parade, Night Extravaganza and activities at downtown Howelsen Hill and the big ski resort mountain Mt. Werner is a cherished part of the local’s life here.

Our son is grown now, flying off much bigger jumps now in Europe as a ski jumper and Nordic combined athlete. With the age limit set at 14 years old, it’s been four years since he last did any of the street events. And my husband, retired from the Ski Patrol, no longer joins the other patrollers in their crazy ski jump through a literal fiery hoop during the Night Show Extravaganza.

We’ve outgrown the Soda Pop Slalom and the Parent/Child downhill. but we’ll never outgrow the Winter Carnival as spectators. And as we stood outside of our downtown office with spiked hot cocoa in hand to watch the Night Show Extravaganza last Saturday night, we learned that we weren’t alone – that many tourists and second home owners make sure to visit every year during the carnival, to watch the Lighted Man descend the steep face of Howelsen with fireworks shooting off his back.

I took two short clips of the Street Events and the Parade, finding the crowd with their dogs and babies to be an equally entertaining part of the events and the Parade.

If you’ve missed the Carnival and want a peek view, go to The Shack, my favorite long-time breakfast spot on Lincoln Avenue between 7th and 8th, and look up above the plate-glass windows that look out onto the street. there in all its glory is a large vrsion of the painting I have hanging on my dining room wall. And there at The Shack I believe you can still buy a copy of that painting for yourself.