Much has changed in the mortgage industry over the past five years. Where there was once hundreds of lenders with various programs vying for business, there are now just a handful of lenders, many of which are backed by the government. Perhaps the only constant is the revolution of loan programs. New loan programs are coming and going all of the time. It is important to stay up to date with loan programs, even if you don’t necessarily think you will seek lender financing any time soon. You never know when you will need to get a loan or have a buyer that is looking for a mortgage.
Lenders are constantly looking for business, either through their broker outlets or branches. The biggest difference from five years ago is that loan servicers and investors who buy these loans don’t want to have another mess that resembles the mortgage crisis of a few years back. Because of this, the loan process is much stricter and loan programs are more vanilla. They also need to walk the fine line in attracting new business and come up with programs that can give them a competitive advantage. This has led to changes in programs, with some lenders now offering stated income loans and other seemingly never to be seen again features in an effort to increase market share. This could be a sign of things to come, or the beginning of another free-for-all in the market.
Even if you buy your properties with cash, you should be kept updated with any program changes. Most lenders will not let you go off the appraisal amount within 90 days, but there are a few that will go less with documented improvements. Whatever your particular niche investment is, you should want to stay updated. If you flip properties, you should want to know about changes in FHA guidelines. This has a trickledown effect when you sell and can impact your price and the amount of time on the market. If you seek financing on multifamily properties, you should want to know which lenders you can put 5% less down on or which you can refinance and pull cash out with. There are an increasing number of niche lenders that may have a program that fits your needs. Contact your broker or lender and ask to be informed of any updates that may affect you.
This also works on the flip side as well. If you have a program in mind from a few months back and have been gearing up to use it, you should stay in contact and make sure it is still available. For as many new loan programs that enter the market, there are some that get left behind as. You never know when you will get an opportunity to buy. When that happens, time is usually of the essence. If you waste a few days looking for programs instead of acting, it may be too late.
Loan programs are always changing and coming and going. Ask your mortgage broker or lender to stay updated with these changes. The right loan program could give you options you never thought were available.