More and more Consumers are using very creative financing. Lenders have a myriad of programs to choose from. 100% financing...Will Sellers be in trouble down the line? Will there be enough equity to keep the Realtors in the equation? I have run across so many of these situations recently. What is your experience?
U - Oak Brook, IL
XCO
Hi Michele,
I have also found that there are many people in some desperate need to do something with their current mortgage. I have been able to help a few of this clients, but for the most part some of them purchased their home with 100% financing, low credit scores and high Debt to income ratio (they purchased the house almost at 55% DTI), maybe a few recent late payments, so it makes it very difficult to help.
Another trend I am seeing is that some lenders are "helping" this people by putting them into Options Arm (where there is deferred interested or often called negative amortization) borrowers are usually so happy to see the lower payment and don't seem to understand that the difference is going into their principal.
I always ask my potential clients what is their comfort payment, and work their purchase price from there. I often can see that many of my clients could afford a higher purchase price but since I understand they will also like to enjoy it I refuse to make them eat macaroni and cheese for the next 30 yrs.
Great post Michele!
Dec 19, 2006 06:28 AM
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