So, you want to get a loan?

Got the credit worked out, have a great income and have the home picked out.  Boy, I sure hope you have already talked to your lender.  There are conforming loans, FHA loans, jumbo loans, jumbo conforming loans with Fannie Mae and more with Freddie Mac.

But, unless you’re getting an FHA loan or putting 20% or more down, don’t forget your mortgage insurance company.

An example – AIG United Guaranty.  They are one of the major mortgage insurors.  And, guess what?  If you want to buy a home in a “Declining Neighborhood” you will have to put a lot more money down and get a smaller loan.  La Crescenta (91214), La Canada (91011), Glendale (various 912 zip codes), Sunland (91040), Tujunga (91042) and most other local neighborhoods are (you guessed!) “Declining Neighborhoods”.  AIG’s website with info on “Declining Markets”

Recent changes to AIG’s underwriting guidelines beg the question, “Are lenders going to make a difficult market worse?  Will these guidelines force additional buyers to desert the home market?  It’s too early to say – May was a very good sales month.  But it’s worth remembering that despite the foreclosures and the difficult market for loans, Inventory in La Crescenta, La Canada, Sunland, Tujunga, Glendale and the surrounding communities is actually in balance or, in some cases, favors the seller.  The current level of foreclosures continues to keep up the pressure and offsets the somewhat low inventory.

Check out this PDF with AIG’s “Declining Market” zip codes.  Who’d have guessed that La Canada among others is considered a declining market.  That doesn’t seem to make much sense!