last week the Treasure Valley was designated a "declining market" by 2 of the major mortgage insurance companies. I would expect the rest to follow. What does this mean?
No matter what approval you have from the lender, you now have a situation where the mortgage insurance companies will not insure up to 100% loan to value. This effectively means your zero down loan is now a 5% down loan. To a first time home-buyer, that 5% might as well be a million dollars. How can you avoid the mortgage insurance issue?
You can go with government programs such as the rural development for purchases. The Veterans Administration loans can be used for purchases and no cash out refinances. Finally, FHA can be structured with a down payments assistance program gift and it becomes zero down. FHA will also allow up to 95% cash out refinances. Thats basically the zero down options available to us in the Treasure Valley.
This is not the end of the world, its just going back to a more sensible time when you had to save for a house. The last couple of years have shown us that not everyone was cut out to be a home owner. Maybe if wall street had not bought all those "just out of bankruptcy, 580 fico, 100% loans", we wouldn't have had the situation we have today. Give it a year or so and we'll probably see the market stabilize and then we'll have some of the 100% options again.
This change highlights the need to work with a professional, full time mortgage broker who spends the time to keep up with the changes. If your mortgage broker has left the business or dosen't do this full time, then call me at 208-955-1234 ext. 30. I'm here for the duration.
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