Underwriting…the way it should have been.
Everyone is talking about it. The credit crunch, tougher lending guidelines, reduction of products, demise of lenders, and no more 100% financing. Yes, the industry and market are going through some shake-ups but the sky is not falling! As much as the real estate market was fruitful for many during the “boom” that last 4 years too long – it is time for an adjustment. Unfortunately, this market adjustment is hurting a lot of borrowers and good people along the way. What can we do? Press on and learn from the mistakes of the past. Underwriting is tougher and in some cases it might be going overboard with lender stipulations – but it is all for the greater good of the market and lenders. ( Which is very important! )
Think about it. Many residential areas have lost value and many borrowers are struggling on some of the financial obligations they made in the past. It is time for the industry to change and so must borrowers and industry professionals.
Here is my two cents. Prepare, research and accurately evaluate the financial obligation you are making before pulling the trigger. Today underwriting guidelines are focused on making sure you can repay the loan and it should have been that way for a long time. Borrowers and industry professionals need to communicate and really crunch numbers to make sure that the new homeowners of tomorrow don’t fall victim of credit woes down the road. Spend less than you make…focus on keeping good credit and thoroughly evaluate your real needs before you fall in love with that house 30K above your comfort zone.
Good luck.
