Today’s Real Estate Market Provides Plenty of Financing Opportunities for Buyers

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Understandably, many buyers are extremely wary of approaching lenders about purchasing a property these days.  And this trepidation comes for good reason.  After the 2007 mortgage crisis and the subsequent recession hit people did not know what to expect.  Around the same time a perfect storm was building that ended up in the revelation of one of the most unprecedented mortgage scandals ever to hit the US in 2010.  The result was cautious lenders, nervous borrowers and a lot of uncertainty about mortgages.

Fast-forward to today and a lot of that has cleared up.  The national real estate market has come back down to earth, the banks involved in the robo-signing scandal have settled with regulators and lenders are back in the business of providing loans to deserving homebuyers.

Lenders Requirements Soften As More Consumers Apply for Loans

Just a couple years ago it seemed that in order to buy a home, buyers would have to jump through impossible hoops of proverbial fire. There were countless checks, verifications, documentation requests, explanation letters and more.  Many buyers were faced with grueling processes that left them broken spirited and dejected throughout the ordeal.

But today, more and more buyers are reporting easier mortgage applications.  Lenders still do have their requirements – especially in light of past mistakes that led to countless foreclosures that might have otherwise been avoided today.  As long as a buyer has a job, decent credit and transparent financial records – the mortgage application is fairly simple these days.  Banks like to see stable employment for at least the past two years in most cases and their definition of good credit is a credit score of at least 620.  Being able to demonstrate the source of all income is another factor that weighs heavy on creditors’ decision to approve mortgage applications.

Ideal Market for Buyers In Multiple Scenarios

First time buyers have an excellent opportunity to buy at record-setting low interest rates.  In fact, for buyers with at least a 20% down payment on their home the rate is currently below 4% for qualified buyers in many markets.  Not only does a 20% down payment these days ensure a lower interest rate but it also eliminates the need for Private Mortgage Insurance – an expense that can add a significant amount to each monthly payment.

Homeowners with equity in their existing properties are at a perfect advantage right now with the ability to move up into a bigger and better home, either at the same monthly payment or by reducing their mortgage term and effectively paying it off sooner.   In addition, their property tax bills will be lower given that they are paying less on their properties.

Finally, the current market presents an excellent opportunity for investors – whether to rent out the property, hold on to it as a vacation home or flip it for a short-term return on investment.  Once again, with 20% down this is an unprecedented opportunity to break even or see positive cash flow almost immediately on a new home or condo.
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If you would like to explore your options in today’s market – contact us today!  We’ll review your real estate goals and work to achieve them so that you can create long-term wealth while enjoying the peace of mind and happiness of owning a great home!