Are Lenders Overreacting?
When the housing bubble burst in 2008, home prices began to fall. Today, the Glendora real estate market is very appealing if you can qualify for a loan. In addition to good buys on traditional listings, the short sale and foreclosure markets add to the list of very good buys out there. While It may seem that lenders are being unreasonably tough when you compare today's loan requirements to what lenders demanded during the peak of the housing bubble, look what happened when loans were available whether you qualified or not. And then, if you compare what lenders are requiring from borrowers today to what they required before the housing bubble, they do not look so harsh. It is all relative, as the saying goes.
Is 100% Financing A Thing Of The Past?
During the height of the housing bubble it was common for buyers to get 100% financing on the home they bought. But in the past, before the real estate market went wild, homebuyers were expected to put down 20% or more on a conventional loan. VA and FHA loans were a lot easier to handle but harder to get in many southern California areas due to the high home prices. Now, in today's world, a prospective homebuyer should figure on a 5% or a 10% down payment. The days of 100% financing are over, at least for now.
Back To The Drawing Board
If you want to get a home loan today, you had better have a good credit score, a good job and not too many monthly expenses. If your credit score has slipped below 700, better clean it up. A good credit score is not the only criteria but it is one of the most important factors that lenders look at before granting a home loan. So, check your credit score and clean up any problems.
Today's Reality
It is not a good thing when thousands of families ขายบ้าน lose their homes and their ability to borrow for years into the future. When 100% financing loans and ARMs were easily available, people bought homes they really could not afford. ARMs or Adjustable Rate Mortgages may still be available but should be approached with great care and thought. Investors who purchase property planning to flip it within a year are likely candidates for an ARM, but a family hoping that a year from now their income will increase so they can afford the higher payments may not be a good prospect for that type of loan Many of today's home foreclosures occurred and will continue to occur because adjustable rate mortgages reset and the payments suddenly become unaffordable. All in all the new approach to lending may frustrate many consumers who are anxious to buy a home and Realtors who are anxious to sell it, but may be a good thing after all.
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