You have been reading the news of doom and gloom for months now in the media, and now are hearing from the same folks that it is definitely time to purchase a home as prices have fallen and there are some fantastic deals that we have not seen in twenty years of real estate. To say that this is a buyer's market is an understatement.
Now here is the "fly in the ointment" part of purchasing your first home, or perhaps a move up hom in this market. The lenders are getting tougher and tougher. I have been helping people obtain the best financing and interest rates for over 18 years, and have never seen such a withdrawal in the capital markets as to what I am seeing today. Here is the reasons why from my perspective on why the banks are getting tougher on loan applicants.
1. Default rates for specialty loans and investor loans are at a record high. Non owner occupied homes are going through equity reduction, interest rate changes, and cash flow problems which are causing payment defaults and delinquencies.
2. The market that securitizes loans which enables banks to lend out more money have tightened their guidelines on credit scores, down payment, and debt to income ratios. New underwriting models have gone conservative and now require full documentation on income, debts, payment history, and risk. Risk models that existed a month ago are now defunct and have become more restrictive. The importance of knowing your credit scores and changes to your credit monthly is critical. Credit lines for equity lines are being automatically withdrawn; credit limits on credit cards are being reduced, and more creditors are withdrawing their offers to select groups of customers for credit card increases.
3. Various states around the country, including Ohio have legislated changes in the mortgage industry that demand more disclosure; limiting the type of loan programs that a lender can offer; and requiring that all loan applicants prove their sources of funds and income, with the elimination of NO DOC or STATED income loans.
Does that mean that you cannot obtain financing? NO! However, the importance of getting pre approved is more critical in this market than ever before.
Where to find some of the best properties for sale out here in Northeast Ohio? Let me suggest a few websites that you can visit, and some phone numbers where you can get specific information about select properties and not spend hundreds of dollars in gas looking for that right home. These are proven sites and real estate professionals that I send my friends and family to, as well as all of my classmates from the investing classes I teach at Polaris and Hudson schools. All are By Referral Only members and subscribe to a service model that equals that of Disney, Nordstroms, and the Ritz!
1. www.Living-in-Cleveland.com. This website is great for finding homes for sale and getting some free reports that might help you make an informed decision on buying a home. Very interactive and offers great follow up from Kim's team!
2. www.ohiorealestate4you.com. Another great website for finding bank owned properties listed in Lake County by Doree Adams, but also those who are being sold for quick sale. Doree's team is great to work with and she is very thorough on working with the banks and their subsidiaries for a smooth closing.
3. If you are driving around and need quick information on a listing, and would like to schedule an appointment or obtain more information about a property, all you have to do is dial this TOLL FREE number, 1-866-944-1238, and follow the prompts and give the property address, and you will obtain all the preliminary listing information needed to see if this is a house you would be interested in previewing. Easy to work with and applies to any home listed for sale in the NORMLS system.
4. Want to work with a Real Estate Consultant vs. a Pushy Salesperson on the West side of town? Visit www.hollypratt.com for information on first tme buyers classes offered, listings for short sales and REO's listed in Lorain and Cuyahoga Counties. World class service is provided by Holly's team, and offers additional information not normall found on most sites.
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