hello and welcome to real estate a disease the program that will bring you the most current information about real estate and home staging i'm karen bizzaro home staging realtor with keller williams real estate professionals and today's topic discussion is mor and what to expect in two thousand and eleven my guest today is lou potosi from victorian finance we'll be talking about the changes in mortgages from last year and how they affect you when buying a house we'll be right back with this edition a real estate agency a train guest today is a mortgage banker with eleven years experience in the mortgage profession and sixteen years in credit repair he's been named as one of the top mortgage professionals in the pittsburgh area for the second consecutive year by five of scrutiny on mortgages underwriting guidelines have remained tighter we've had a lot more proving of what you're saying on the application it used to be that you could simply state the things on the application and have the and a writer look at it check it off and that was it now everything on that application has to be verified and proven by more than one person to see a more intensified process and we try to let buyers know that up front which is you know that's one of the keys but there's no more fill out the paperwork wait two weeks is your keys so that's that's the biggest change that a buyer would see from our standpoint regulations there's new financial reform laws in place it's all guarded are protecting the buyer and so that is a huge change more education continuing education and so it's been a big adjustment the good news is the people who are still in this business are more knowledgeable than ever so that's that's been a pretty good change i think to tell me it's been a rumor in fact that meets my increas but when when people hear rates are rising they sort of panic there is no reason to panic rates right now are right around five percent they were a little higher there's been a little correction most forecasters think that by the end of the here we're probably looking at rates in the mid fives by no means are we headed to a seven or eight percent rate market so that really leaves borrowing at a very good do that now there's a much more strict level of checking it but nothing's changed from the buyer standpoint as far as proving your income showing us how long you've been on the job you know we still need the same things in order to qualify you money is out there to lend you just have to make sure you know how to get qualified going in so it takes some patients ok so can you tell me what actually determines the market well there are several things that determine the rate but you can look at the bond market and see how that's going a lot of times over here the stock market is doing fantastic when that happens normally there's only two places people invest money the bond market which is a little safer and less risk and a less of a return in the stock market there's a little risk here but rewards it was with greater profit  well we get a red alert you know i get i'm on my phone all day showing what these markets are doing and you can see fluctuation in and out the day so if you see the stock market doing really well people are going to take their money and put it there that makes the bond market suffer and interest rates will go up so that's a mix and then thought that's the biggest thing then this can affect that i mean some of the problems abroad have affected both markets the mortgage back securities being purchased by the government you know when that stops that will affect things so there's a whole plethora of things that will affect that but on a day to day basis if you look to see what happens with the bond market you can pretty much tell it's going to happen with then i'm going to base that on someone with perfect credit and plenty of money down or great credit and the f h a three and a half percent down and i'll give them the best rate available the danger in doing that is that is not an answer for everyone because you know we go back to these changes one of the big changes that i failed to mention was the rate is going to be commensurate with your credit score that's still a big fan there anymore than ever there are more adjustments now they've raised what they're calling excellent credit and we talked about this in a previous show from seven hundred to seven twenty to seven forty right so you have done nothing different with your credit but now because of the tightening of the banks they've now raised that level so if you've got a seven fifty score and you've got money down or if you're doing an f h a with a three and a half percent down i can tell you the best available rate if you come to me to get pre approved and you have a six sixty score that may be a different rate so it's a dangerous thing to tell one person that they tell another person and when they come to you when rates are not the same they don't understand why they can't get that what's it like when you hear you call something then like you can control and this booklet can help from keeping your family healthy to saving for retirement or to your free copy now from the american diabetes association because we want everyone to be healthy and happy org so tell me now is it true that only people with a perfect credit still score and twenty percent down can actually buy a house so i know i'm glad you brought that up because that's one of the things i see on the national popular program in the country right now and it requires only a three and a half percent downpayment furthermore it requires a little bit less than perfect credit so if you have mid six hundred you could have had a bankruptcy three or four or five years ago on there and still be able to do the loan we also have a program that we combine with the f h a that's run through the state it's a ph f a long program for people that he even have a lower credit scores and no money so this thing about perfect credit twenty percent down i think it scares the market away i think it's one of the reasons that the market is a little stagnant and i think i would love for people to get the word out to tell them call us no matter what your situation is and we'll tell you if there's a program eight out of ten times you're going to be ok so i mean get small packages now  loan is going to be more straight and narrow path better credit because if you have less than those six eighty actually less than the seven forty you're going to pay a higher rate but that is for people in the optimum position of buying a home or people that have more money to put down if you've got to percent you don't want mortgage insurance so we can put you into a conventional loan less restrictions on the property and i'll get into that  minute but it's the cleanest program the f h a and a lot of people here f h a get nervous because they think that takes forever we still can close an f h a and thirty days the keizer that is letting everybody upfront know what has to happen have an appraiser get out there quickly and when i say that there may be some property requirements they're looking at health and safety issues it's not like it used to be where they were looking at everything if you've got peeling paint on an old house it has to be remedied because of the lead based paint if i have one today where they have to put a door at the top of some concrete last time and if somebody falls that's a safety issue if there are light fixtures with bent wires hanging out they've got to be fixed but those are the main things they allow some collection items to still be on your credit in certain circumstances so people that had a rough time that have now repaired their credit but haven't out there and we're still locking in pennsylvania we haven't seen it is roughly florida's going into another little dip we've heard some people talk about a double dip it i think now that foreclosures seem to be selling a little quicker but as for pricing i think we are because i just read a couple of reports where pittsburgh is supposed to be on the rise as much as a three and a half percent increase in prices over the next year so that's tells me as a mortgage person who advised my buyers don't wait around too long because if prices are going up and the rates just slightly went up you're going to lose out on an opportunity they say it's a buyer's market and i was  in these go pretty much with all loans these are the things that we're going to ask for first of all we ask for these in a pre approval now it used to be that we'd ask a couple of questions and issue a pre approval because of the level underwriting scrutiny most mortgage professionals will ask for these things so we can really give you a professional pre approval that means you can buy a house so we're going to ask you for two months consecutive bank statements all pages of it and the reason i'm bringing some of this up is people get agitated when you ask them for the back page pick an advertisement but that's the level of scrutiny now all pages we need your two most recent consecutive pay stubs because we want to see what you're here to date income is it also shows if you've been on that job for thirty days that brings me to porton point people that want to change jobs if you change jobs in the middle of this process you will have to wait an additional thirty days to close because we want to make sure you're staying on the job so my advice is if you can help it don't switch jobs in the middle of this so we'll need those pay stubs we need two years of the biggest twos on any job you've had if you work two weeks on a job we need the most recent ira for a one take statement we usually ask for that because it's part of your assets so if you're going to use it as part of your down payment then we definitely need all pages of it and then the name of the brave your homeowners insurance company that's always one of the things we wait until the end for unfortunately and in this case we like to get it upfront so if we have these things we give you a full pre approval and this is most of what you'll need and initially that this will go to the underwriter with the appraisal and she'll tell you what else you when buying a home you have any questions about applying for a loan or about mortgages just you know lou lou at victorian finance dot com the real estate information on the newly launched area web site called peter's patch dot com it's an informative peters township hyper local news site one of twelve in pittsburgh eight hundred nationwide it's packed with news and upcoming events and current peers township open houses and real estates information every friday at spear dot patch dot com and according to the website an editor andrea bosco it's your source for local knowledge you can't live without now to recap for our program due to the changes in the markets the level of scrutiny when applying for a more mature has gone up it has become more critical that a buyer prove his finances and the fact that interest rates are on the rise and the rate should settle in the mid five percent range in twenty eleven finally choosing a mortgage and real estate professional who is going to let you know what is expected of you for the