(This is a repost from Spring of 2008. Get your Last three years Taxes ready, along with a nice heapin helping of patience if you want to buy a home this spring. 60 days to get a loan….ouch)
Ever heard the one about the mortgage broker who blew the financing so that they wouldn’t have to honor the lock?
Or how about the one where the lender went bankrupt at closing?
….Or, how about the one where the bank approved the loan, then pulled back at the very last minute, while the parties were sitting in the closing, waiting for documents to be e-mailed in?
Yes, these, and other horror stories are making their way around the offices these days. while some of them will surely become urban legends, we have been noticing an uptick in alternative mortgage strategies. Here’s a list of a few of them. (These are actually, very very similar to pre-1998 best practices, BTW, for people who can remember Real Estate from back then.)
1. Find a co-signor. This one is a classic, and becoming back in demand. By co-signing with a family member (usually parents) a young buyer gets to get the credit score of a sibling or parent, and then makes the payment. This was a very common arrangement in years past, and we are seeing it come back.
2. Private Money. Sound Exotic? hardly. It isn’t exactly at the bargain basement prices of some mortgages, but you’d be surprised how many people are out there looking to lend money against a Real Estate Asset. Be careful when doing private money deals, because things like remedy, and evidence of payment, etc. can all hurt you alot. Best to get a lawyer to help out, but once everyone is on the same page…..well, these things tend to work out pretty well.
3. Your local bank! Yes, your local bank used to be the only lender in this area, and it is looking like a return to that time is a-comin. get to know your bank manager better. You know how you used to complain about not ever being able to speak to a human at those large mortgage companies, well, now you can speak to a human, only problem is, that human now knows alot about you, so you’d better make sure your payments are current!