By: Mike Kennedy mkennedy@railey.com 301-616-6106 March 17th, 2009 Category: Deep Creek Lake Buyer Info

Want an appraisal?  Need your chimney cleaned?  Planning to install new carpet?  Want to check on possible re-financing?  Need Title or Homeowner’s Insurance? The Garrett County Board of Realtors has set up a new link from their site:  http://garrettcountyboard.blogspot.com/ where businesses related to Garrett County and Deep Creek Lake Real Estate are organized in a Directory of Services.  This is available to the public, continually updated and contains information on everything home-related from well drilling to landscaping to moving to garbage removal.  Need a service?  Check it out.

By: Mike Kennedy mkennedy@railey.com 301-616-6106 October 15th, 2008 Category: Interest Rates and Loans, Obtaining a Mortgage

Jerry Merrick, Vice President of Mortgage Lending at BB&T Bank, stopped by our office again yesterday to give us an update on the mortgage industry after what was certainly a turbulent week on Wall Street and other financial sectors. For buyers out there who may be considering purchasing a second home or vacation home for sale at Deep Creek Lake - here are some points to consider if you will be obtaining a loan;

Credit Scores

Lenders still very much want to lend money - however, only those borrowers with 800+ credit scores are going to get the lowest rates without paying any upfront points. Borrowers with credit scores less than 800 can still get loans - but the banks are now charging upfront points to these people to get the same rates. If you are thinking of purchasing a piece of real estate at Deep Creek Lake or in Garrett County Maryland and are going to borrow, it may be a good idea to check your credit score first to see where you stand.

Interest Rates

With all the turbulence in the markets last week - interest rates went up nearly 1 whole percentage point between Wednesday of last week and Monday of this week. In fact, at one point last Friday, Jerry reported he was receiving new rate sheets every 15 minutes! That is how uncertain the mortgage industry was reacting to last week’s events on Friday. Should you lock in your interest rate now? That’s a question only you can answer - but if you are someone who doesn’t mind taking chances then you might want to consider waiting a while to see if rates come back down. If you are someone who doesn’t like to take chances and you are comfortable with your payment terms at the current rate levels then you may want to consider locking in now to avoid the chance that rates may go up again. It all boils down to your comfort level - no one can predict for certain which way interest rates will head in the future.

Appraisals

Lastly, starting at the end of this month a new regulation goes into effect that changes the way appraisals are ordered. Banks and mortgage brokers will now have to order all appraisals thru an independent 3^rd party - this 3^rd party will then order that appraisal from a licensed appraiser who agrees to do it for the lowest price. This is both good and bad. Good in two ways - (1) that it will probably lower the appraisal price for the borrower and (2) it will now eliminate any upfront communication or chatter between the lender and the appraiser - which some would say created most of the current problems in the mortgage industry we have now.

However, it’s bad in the sense that this new system is now searching for the lowest priced appraiser and not the most qualified appraiser. In our real estate market, it may result in the lower priced appraisers from Frostburg and Cumberland coming up and doing appraisals at Deep Creek Lake. Our local appraisers, who do charge a little more, have proven they do quality work in a very specialized market - they understand this resort market - appraisers who work in other markets, who may bid the lowest price just to get the work, more than likely do not have this same same specialized knowledge and experience. This new system may very well create another set of problems for the mortgage industry down the road - underwriters making loan decisions based on appraisals from what some would consider “less” qualified appraisers.

By: Mike Kennedy mkennedy@railey.com 301-616-6106 July 15th, 2008 Category: Interest Rates and Loans, Obtaining a Mortgage

There certainly has been a lot of bad news recently about the current state of the mortgage industry in the United States…but for those buyers out there looking to purchase real estate or a home for sale at Deep Creek Lake the big question becomes- “How are all these current problems in the mortgage industry going to affect me?”

Recently, we had the pleasure of Jerry Merrick, a local Vice President of Mortgage Lending at BB&T Bank, speak at one of our sale meetings. He provided us with an excellent update on the current state of the mortgage industry and what second home buyers can expect to deal with when obtaining a mortgage loan. Most of the changes in the mortgage industry are being made in the non-conforming “Jumbo Loan” segment -loans over $417,000. Coincidently, very few changes have been made in the conforming loan segment - loans less than $417,000. Below is a quick summary of these changes;

Stricter Underwriting

For those looking to borrow more than $417,000 banks are returning to more traditional underwriting standards. This means that borrowers will have to document and prove all stated income and be subject to asset verification. Gone are the days that you could simply write down on your loan application how much money you make and the bank would take your word for it.

Larger Down Payments

You’ll probably now be required to put down approximately 20-25% on the purchase of a second home. Loans that only required 5% or 10% down are a thing of the past.

Two Appraisals

Some banks are now requiring two appraisals on loans for vacation homes priced over $1,000,000.

Points

Those with credit scores less than 700 may now have to have to pay ½ point. Maintaining a higher credit score will be very important in the future.

Unfortunately, those looking to borrow money for the purchase of a vacation home here at Deep Creek will no doubt have to jump thru more hoops - and even though delinquency rates are extremely low in Garrett County and Deep Creek Lake due to the affluent nature of this real estate market - it is important to keep things in perspective - the good news is that banks are still lending money and very much want to continue doing so - and interest rates from a historical perspective are still low - rates in the mid to low 6% range are still the lowest they have been in the last 25 years- with the exception of 2003.

Is now a good time to lock in a rate? Only you, the borrower, can make that decision. If you think that rates may go up with more continued bad news in the mortgage industry then now may be the time to lock in…….if you think that rates may go down as loan delinquencies stabilize then you should probably wait and see what happens. No matter what you decide, these stricter lending guidelines and much needed changes in the mortgage industry should have an overall positive effect on the real estate market here at Deep Creek Lake and throughout the rest of the country.