I heard something on one of the morning news programs today that just made me want to chuck my coffee at the new big screen tv.
Some "knowledgeable" woman was being interviewed about the housing market and was telling the commentator that people would no longer be able to get a mortgage loan unless they had 6 months of monthly payments and utility bills in the bank (cash reserves), after they paid their down payment and closing costs. WHAT?
I haven't even heard of this before, and maybe I heard it wrong, but that's what I heard, and I was listening.
In my local market, that is absolutely not the case!!! Maybe there is a home buyer that has a history of some sort that puts them into a higher risk category and requires them to have this "emergency" fund, but a normal buyer has not required this, to my knowledge.
Just hearing that scares the crap outta people, for crying out loud! I want good buyers to make purchases, and I don't want people to overspend or be under-qualified. But this kind of message (the one about how hard it is to get a loan) gets to people who really are qualified and they hold back!
This is a great buyer's market, a great move up or over market, for qualified buyers! I've run into 3 people in the last 2 weeks who have great jobs, make a good income and want to move, but they're afraid to have their credit score checked!
I've asked, have you missed some payments? No, they just don't want to subject themselves to the investigation into their own credit score. They're afraid they won't have the high standard qualifications that are required to get a new loan today. In Billings Montana we have a very small short sale, foreclosure market, it's really only about 3 to 5% of the homes for sale. Our average home price keeps going up!
Some homes are not worth what they were in 2007, that is true, and we have sold about 44% less homes than in 2006, but I repeat, of the homes that have sold, the average price is up, even above any other time!
I guess I'm kinda wondering how to reassure people that a home loan is not as hard as it looks, when you have paid your bills on time, saved a little money and have good income. But when someone goes on the National News Network and says that people now need 6 months of expenses in a ready cash account, we've got a problem.
Maybe I should just stop watching Saturday morning news programs, they might be too much like Saturday morning cartoons!
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