“Don’t touch that red burner. It is hot.”
“Really? Let me see…”
After 26 years in the real estate business I have seen the mortgage market swing back and forth like a pendulum from one extreme to the other through numerous cycles. After this last crisis things were no different as credit became ridiculously restricted, hindering the housing recovery and boxing in both home sellers and buyers needlessly.
HOWEVER, the fundamentals behind the conservatism are sound and as this article demonstrates it appears some lessons never take.
Credit needs to be available to the credit worthy for an entire host of reasons but 100% conventional financing is asking for it. Even 100% financing for veterans through the VA (They deserve every leg up we can give them) recognizes these risks by having a significant funding fee that declines as you put more money down.
Is it hard to save for a down payment with the high dollar values of homes in this region? Sure it is. But the financial discipline that it takes to achieve these savings are to my mind a fundamental pre-cursor for most potential homeowners.
I believe today’s available 5% down conventional products and 3.5% down FHA products represent the right mix of readily available credit and sound personal fiscal practices.
If you desire to buy a home in the near future but aren’t quite there with the needed cash to close call me and we will put together a responsible plan to get you there and discuss options when it comes contract time for structuring the deals so it best helps you with your cash positions.
It’s a good life.
Source: 100% financing is back