According to a recent article by Martin Crutsinger, qualifying for a loan is getting even tougher. Recently 100% financing has all but disappeared in the Kansas City area and the Federal Reserve recently reported that even more banks are tightening standards on their loans, including home mortgages. In a survey by the Federal Reserve, 78 % of surveyed banks had tightened lending standards either considerably or somewhat.
This means that for some to qualify for a mortgage, they need to have good credit scores and available cash to make the down payment. Recently the buyer has been required to put down a minimum of 3% of the purchase price of the home, plus closing costs. This means that if someone is buying a $150,000 home, they would need approximately $4,500 as a down payment. Remember that this money CAN be in the form of a gift from parents or other family members, so if you don't have that much cash on hand, it might not hurt to ask!
Brad Papa is a licensed real estate agent in Kansas and Missouri and can be reached at firstname.lastname@example.org, 913-526-4985 or www.PapasInTheHouse.com