Say Goodbye to 100% financing.

Posted on March 27th, 2008 by Nesa Kleinheksel

  What a crazy real estate market we are currently in.  There is no doubt that this is the best time to buy a place but it’s not as easy as what it was.  For the 7 years that I have been doing Real Estate in Atlanta I haven’t felt the aches and pains of mortgage financing as what I am feeling now.   100% conventional loan programs will become obsolete starting April 1st with the only alternative being an FHA DownPayment Assistance Program.   Good alternative but difficult to find sellers that are willing to participate in this.  I am guessing that within the next month we will probably see a rise in sellers that will be offering this to potential buyers. 

So, if you want to be able to buy a loft you will need to have at least a 3% downpayment.  Overall, it is probably good that the Fed’s are doing this but for Atlanta I think it will be devastating because we are such a young crowd with a lot of first time home buyers out there. It is so important that if you are looking to buy in the near future to go ahead and talk to a lender before you start looking at places.  Get pre-approved because it will make things a lot easier once you find a place to put an offer in on.

The newest thing to pop up are neighborhoods being tagged as a “declining market.”  Unfortunately, Castleberry Hill is one of them.  I do a lot of business in Castleberry Hill and the last 2 clients that I have had that purchased in this neighborhood had to put down at least 10% when they were only planning on putting 5%. However, it got tagged as a “declining market” so in order for the lender to approve the loan they had to put down 10%. The only alternative is  go with the FHA Downpayment Assistance program.  Again, that’s tough because your basically rolling the downpayment into the purchase price which means it also has to appraise for that.  There could still be some lenders out there that have programs available where you would only have to do 5% down in declining market neighborhoods but both clients used different mortgage companies and they both had to put 10% down.

The lenders are definitely tightening up on their guidelines which makes the home buying process much more difficult than what it was a year ago, even a month ago for that matter.

With that being said just be aware what could occur when you are buying a place right now.  If you are a seller make sure your agent does their homework about the buyer’s qualification that put in an offer in on your place and don’t start packing until you have a firm “clear to close” from the lender!  - Nesa Kleinheksel - 9 Mile Trolley Realty - The Loft Stop

 


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One Response to “Say Goodbye to 100% financing.”

  1. Say Goodbye to 100% financing., on March 27th, 2008 at 2:19 pm Said:

    [...] AllMortgageInformation.com wrote an interesting post today onHere’s a quick excerpt   What a crazy real estate market we are currently in.  There is no doubt that this is the best time to buy a place but it’s not as easy as what it was.  For the 7 years that I have been doing Real Estate in Atlanta I haven’t felt the aches and pains of mortgage financing as what I am feeling now.   100% conventional loan programs will become obsolete starting April 1st with the only alternative being an FHA DownPayment Assistance Program.   Good alternative but difficult to find sellers that a [...]

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