Lending Atmosphere Rapidly Changing

If you haven't been following the recent developments in sub-prime lending, here is a brief update. Sub-prime refers to more risky loans written by banks for borrowers who cannot or would rather not qualify for a more conventional loan. Conventional would refer to loans where the borrower's income and assets are fully documented and verified, and the loan to value is no more than 80%. There is also a Federally insured loan program (called FHA - Federal Housing Administration) that will offer up to 100% financing. Any other exotic loan products where the borrower is "stating" their income but not providing supporting documentation, and they are borrowing up to 106% of the appraised value of the home are commonly referred to as "sub-prime" or "Alt-A" loans. This market has almost completely disappeared. My preferred mortgage broker has informed me that she is no longer aware of any sub-prime products out there. What that means for you is that if you are a first time home buyer and you need to finance 100% of your purchase price, you are probably going to have to use an FHA loan (which technically will only finance 97% but the other 3% can come in the form of a gift).

Harbour Island

Harbour Island is a great little town right in downtown Tampa. It's an island away from the hustle and bustle, but it is still right in the middle of all the action. Today I showed a really nice condo on Harbour island. It is nicely priced at $339,900 with plenty of square feet (1600) a 2 car garage, and a tri-level design floorplan.

Buyers: Take Advantage of a Free Service (Follow Up to last post)

In my last post I gave a basic overview of how agents make their money (for the benefit of all you first time home buyers out there). I did want to give a small caveat, though: although the seller pays a comission to the listing firm who in turn shares that comission with the selling firm, there are typically processing fees that are charged both the seller and the buyer. So, as a buyer you might be asked to pay such a fee (it could range anywhere from $200 to $400). This is also a contingency based fee and it is only due at closing as part of your expected closing costs.

Buyers: Take Advantage of a Free Service

If you have a Buyer's agent, you are basically getting a free service. That is because the comission comes out of the Seller's proceeds at closing. What happens (in my part of the country, anyway) is that when a seller wants to sell a house, most of the time they will hire a real estate agent to find a buyer for them. The fee they pay the agent is a contingency based fee paid by the Seller at Closing. The agent who listed the property will try to sell it him/herself, and will also offer (usually half) of the comission to any other agent who brings a Buyer.

Condos Downtown Tampa

OK, the other day I showed a condo downtown in the Channelside district. I was amazed, it was very nice but boy do you pay for location, location, location! This was a 600 SF studio for $190,000 and that is a deal! It's right next to where the cruise ships come into port, and there is a real electric cable car you can ride to Ybor City (which is party central for the Tampa area).