Obtaining a mortgage to buy that home is a little like riding the scrambler at an amusement park. The industry went one direction, then suddenly, and with a bit of a jerk, started another direction. Things then changed again suddenly and then, you guessed it, back it went the other way. Right now it is possible to get a mortgage, but the credit score will need to be respectable and a regular pay stub will be required as well. Add to that at least a 2 to 3 % down payment and chances are, you will qualify for a mortgage. Recently, however, I have had a number of clients told by lenders that they needed to rent or lease for at least one more year before being qualified to purchase a home with a mortgage. Call them conservative lenders or whatever, but money is definitely not flowing as readily as it did just a few short months ago. Then entire industry is reeling from some of the rampant lending of the last two years. Now the foreclosure rates have risen to unacceptable levels and housing is taking a major hit. When will it end? Hard to predict. Some of the "watchers" say as much as a year and a half until things start to "even out" to a semblance of normalcy. We'll just have to wait and see.
Donna, what is old is new again.... anyone that has been in the business for less than 10 years doesnt understand the "old" way of doing loans.
We had no income loans years ago, but they required good credit and a down payment. Some how we went nuts and thought real estate loans would not go bad and everything got rated triple A by the ratings agencies, and we were doing 100% financing on no doc loans with low scores... it was DUMB!
Lucky for us that have been in the business for a long time, We know how to spell FHA, we know how to read a tax return, We know how to qualify people. I know that I never put someone into a loan they could not afford, it is a conversation that I had with every buyer... But there are a lot of people that only cared about the commission check which is WRONG... and look what happened.
There are still No income loans, but you need to verify assets and a job and have good credit.... So there is still a place for the self employed person with sheltered income. the so called "liar" loans should never have been there to get someone into a home they could not afford... but everyone gets caught up in the American dream and wanting to keep up with the Jones with out thinking about having to write out the check every month... It is probably a good thing in the long run, we will probably see some of the products come back in a year, but not anywhere near the extent we saw in 2006. (it was 2006 when we first started seeing the changes)
have a great 4th of July
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