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Buyers and Sellers - beware! Borrowing money to purchase a home today is more like it was 10-15 years ago. 20% down, good credit, AND a reputable lender. 100% loans? Who knows? FHA loans will become more popular since they require 3% down, certain income, etc. Your Realtor needs to be familiar with your lender if you plan to purchase a home, and on top of the loan that a buyer has for a seller's home. Who knew that such a huge company would falter? I've worked with them for years - no problem! BUT we're definitely in a different market now. No one wants to loan money if it is too risky to do so. When you choose to build a new home, more often than not, you will be using the builder's lender if you want the incentives. Remember also, there is no magic wand to make everything better if you don't have the right Realtor AND the right loan officer/lender. Call me if you have any questions that I can answer. Just yesterday, Tucson's First Magnus Financial cuts off loan funding, sent workers home. No longer accepting applications or funding any more loans - including those that were being processed! I am personally familiar with Great Southwest Mortgage - and my stellar loan officer who worked for First Magnus Financial Corp. FMFC is one of the nation's largest privately held mortgage companies and has fallen victim to the mortgage industry meltdown. The Associated Press reports that the majority of the company's workers were sent home Thursday and that an official said a bankruptcy filing is possible. First Magnus operates a wholesale division and a retail division under the brands Charter Funding, Great Southwest Mortgage, and Frost Mortgage. First Magnus is one of several lenders nationwide facing trouble amid the housing downturn and rising number of loan delinquencies. The Arizona Republic reports that lending guidelines are tightening almost daily for borrowers as the subprime-loan crisis spreads. On Thursday, mega-lender Countrywide Financial Corp. had to take out an emergency loan to keep operating, and Tucson-based First Magnus Financial Corp. stopped taking loan applications. First Magnus is one of the nation's top private lenders. Because of the mortgage meltdown, lenders are requiring higher credit scores and bigger down payments from all borrowers. They are also charging a higher interest rate to people who want to buy a home for $417,000 or more because fewer lenders want to fund them. "The mortgage market has changed drastically in just the past few weeks," said Tom Miner of mortgage firm Miner Kennedy Chmura Associates. "We are getting calls from buyers who can't close anymore because lenders want more documentation or money down," he added. The Arizona Republic also reports that Arizona job growth slowed in July with the rest of the nation, but Arizona remains among the top growth economies, according to a Thursday report from the Arizona Department of Economic Security. The state's unemployment stood at 3.7 percent, compared with the 4.6 percent national average. The growth rate stood at 2.8 percent, down from the 5.3 percent from the same time a year ago. The national average growth rate as of June was 1.1 percent. Arizona is No. 2 behind Utah, and followed by Wyoming, South Dakota and Louisiana. The big surprise was that the construction industry reversed a four-month down trend amid the housing industry havoc. "The picture here in Arizona is a heck of a lot better than other states," said Don Wehbey, the department's senior economist. http://www.azcentral.com/arizonarepublic/business/articles/0816biz-jobs0817.html Today, we have 55,423 active listings. If you don't "need" to sell your home - my recommendation? Don't. Those that were priced "right" in January of this year sold. Those who priced too high and then began reducing haven't sold as quickly. If you "must" sell your home, be sure to listen to your agent. If it's lower than you want to hear and don't need to sell - wait! One example I give buyers/sellers to ballpark a price to sell your home. If, say, your home was purchased for $200,000 in 2002, then add 10% per year - or $20,000 equity. Say another $20K for 2003, 2004, 2005, 2006, 2007 would bring your estimated sales price to approximately $320K. That would be very close "providing" your home shows like a model, has upgrades, etc. Arizona "typically" appreciates from 7-15% per year - depending. Gone are the days of 50% appreciation in one year. We have to "catch" up.....and the above formula should help you do that. NO MATTER WHAT YOUR NEIGHBOR SOLD HIS/HER HOME A YEAR OR EVEN SIX MONTHS AGO! With over 55,000 active listings......you have lots of competition. On the other hand, now is a great time for buyers. There are lots of good solid deals "out there." New or resale, if you have the good credit, qualify for FHA, or have 20% down for a conventional loan.......now is a good time to move!! Have a great week!
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