Financing Changes make Buying and Selling more Difficult
Amy June 25th, 2008
If you have been in the market to buy a home in the last few months, you may know that the lending industry is changing almost weekly. Loans you could get a year ago like 80/20 and 100%, Interest only are a thing of the past. Those with poor credit scores are now being “graded” and assigned higher interest rates as a result, and making some buyers unable to buy a home. The latest trend in lending for home buying is using the FHA loan to allow the seller of the home to contribute to the buyers down payment. This is a way to do a 100% loan with a great rate, not necessarily based on credit score. This too may be eliminated this summer. The FHA is taking major hits on this program and is considering taking it off of the table. Meaning that in the future, home buyers will have to have a minimum down payment of 3% of the loan amount and bring some closing costs to the table to buy their homes. Read the full article here.
In my business, I had not done an FHA loan until 2008. Since rules in lending have changed, just about every home I have sold in 2008 (20) has gotten a FHA loan with some seller assistance or help with down payments etc. A completely new face in lending. Now, with these possible changes eliminating this program, this will truly hurt the market again, allowing less buyers (only those with substantial savings to afford the 3% down payment) to purchase a home. That means, if your home is on the market NOW, get it SOLD!!! If your price range is around or under $250, you are attracting FHA buyers, and the loan they are intending to get may not be a possibility by the end of the summer, reducing the buyer pool dramatically!
If you have your home for sale now, market it aggressively and offer closing costs to get the home sold before this program is pulled from the shelves.
If you are a buyer looking to buy a home, get out there and make a decision. This loan and this assistance may not be there for you at the end of the summer, and then you are stuck renting for another year until the market changes or until you can save the money for the down payment.
This summer is the time to make things happen if you are buying or selling. With lending rules and products changing weekly, you never know what tomorrow will bring. Give me a call if you have any questions about the state of lending or what an experienced Realtor can do for you in this market to capitalize on your options. Experience isn’t expensive, it’s priceless!
Full article here.
Amy Broghamer 513-377-3637
