Time for New Loan Products?

This morning in the Washington Post (Monday, Feb. 11, 2008) a really interesting editorial by Michael Hall was published.  The link for this editorial is:

http://www.washingtonpost.com/ac2/wp-dyn/NewsSearch?sb=-1&st=michael%20hill&

I will not attempt to paraphrase his statements, as I believe the most accurate way to interpret his opinion is to read what he wrote. I would invite you to follow the link and read his comments.

 

I would agree with many of Mr. Hall's contentions.  It is naive to think that as the issues with lending, particularly in the sub-prime market,  self-correct, through foreclosures, short sales and reductions in house values, that eventually, we will not work back to a system where people in certain markets have to borrow large amounts of money to afford housing.  Rents are tied to demand and landlord expenses, so as housing prices go up, so do rents. If a family has to make a large payment for rent, and the payment to own is not too much more, many will opt to buy.  It is part of the American Dream that we all own our own homes!

Shortly before the 'sub prime crisis,' as it is known, emerged, I was starting to hear about 40 year loans. I suspect that we will begin to see more products like this one brought out by lenders. I remember when car prices really started to go up, the traditional  3 or 4 year loan became an option next to a 5 year loan.  Personally, a 40 year house loan makes more sense to me than that, since most people don't stay in their homes for the length of their loan, but folks often own their cars for 5 years.

It will be necessary for mortgage companies to develop new products that will allow willing and informed consumers to purchase homes that are out of their reach with the traditonal 30 year fixed loan.

 

 

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Comment balloon 7 commentsHolly Weatherwax • February 11 2008 10:10AM

Comments

I bought my first home over 20 years ago on a 40 year loan.  There are even some 50 year loans out there.  Now granted they "ballon" in 30 but in some cases it might help drop the payment.  Also a 40 year loan is inthe House version of the FHA reform bill

Posted by Joe Adams (Major Mortgage USA/Branch Manager) almost 11 years ago
Thanks for the update, Joe.  Even with a balloon at 30 years, it would help a lot of folks.  The idea of 40 or 50 years will be tough for some to take, but we have all managed to get used to 30 years--and that is a long time!
Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) almost 11 years ago
Holly - Maybe it's just me, but I can't get your link to work.  I'm getting an "invalid URL" error.
Posted by Tracy Williams Pender, MBA, Knightdale & Raleigh, NC Real Estate (Carolina MaxRealty, Inc.) almost 11 years ago
Thanks, I will check it...
Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) almost 11 years ago
Should be fixed.
Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) almost 11 years ago

Thanks, it's working now (plus I was able to find it manually through WP's website). 

Good read.  I think he makes a good point.  My husband and I always jokingly say that it's a good thing we bought our home when we did because we wouldn't be able to afford it now.  And the Raleigh market is nothing like some of those in, say Southern California.  It's crazy.

Posted by Tracy Williams Pender, MBA, Knightdale & Raleigh, NC Real Estate (Carolina MaxRealty, Inc.) almost 11 years ago

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Russell Consulting Group is a loan consulting and placement company. We work on a corporate level with over 1,000 banks and lenders nationwide, because we have corporate contacts at these lenders, we typically can secure interest rates 3-5% lower than a given borrower working with these very same lenders on their own. There are two very important factors in obtaining an unsecured loan, First is how the application is structured; the lenders have certain guidelines that must be met. The other main factor is placement of this application with the right lender. We will structure the application to put it in the best possible light for the lender, not just to get an approval, but to get the maximum dollar amount as well as the best possible interest rates and terms. We will then use our expert placement skills to match the client with 2-5 lenders who best fit the loan scenario.

LOAN REQUIREMENTS TO QUALIFY
- Personal Loans 670 Minimum Xperian score.
- Business Loans 650 Minimum Xperian score.
- No BK's Or Foreclosures in the past.
- For Business Loans minimum 2 years in business (All business partners must qualify.)


** WE SPECIALIZE IN NO INCOME, NO ASSET VERIFICATION LOANS **

The application process takes approximately 10-15 minutes and the borrower must be by a fax machine or computer to complete the process, Along with having their drivers license handy or Tax ID for business.
 

Multiple approvals will come within 24-72 hours from the time the application is submitted. The whole process takes approximately 5-7 business days to have cash in hand.




We have NO UPFRONT FEES. There is absolutely no obligation to the borrower unless they accept and receive funds.  

 



Michael Jacobs
Russell Consulting Group, LLC
Office- 561-637-7197
MichaelJ@Russell-ConsultingGroup.com

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