I would love to take advantage of the current situation and upgrade …. so .. just how bad are things really? Is it impossible to get financing now?
what is the real truth about all of this?
In UK it’s very difficult to get Mortgage finance UNLESS you have lots of free money … and Mortgage Companies are being a lot harder in checking applicants other commitments (maxed out your Credit Card ? well don’t expect a new Mortgage)
Essentially, if you are a ‘first time buyer’ (or selling your old house to buy another) you need to put down a good deposit (of at least 15%) and have a good job (that gives you a x4 or better cover .. eg you want to borrow £230k ? you need to put down £30k cash and have a job that pays £50k and NO other ‘big’ loans outstanding).
The ‘buy to let’ market has frozen over .. it’s almost impossible to get a buy-to-let Mortgage unless all your other properties have lots of equity and the rent is covering the Montage repayments by +20% or more .. some lenders are demanding you put down 30%+ deposits on any new purchase … (there seems to be a Market expectation that house prices will fall by up to 25%).
The real ‘killer’ is that the house market has ‘stopped’ .. the only sellers are those who are forced (due to debt) – and the buyers are either holding off for prices to drop further or demanding big discounts off asking prices right now. I know one Estate Agent who used to sell 5 or 6 properties a week has sold only 1 in the last month and has no prospects on the books at all right now …
In UK it’s very difficult to get Mortgage finance UNLESS you have lots of free money … and Mortgage Companies are being a lot harder in checking applicants other commitments (maxed out your Credit Card ? well don’t expect a new Mortgage)
Essentially, if you are a ‘first time buyer’ (or selling your old house to buy another) you need to put down a good deposit (of at least 15%) and have a good job (that gives you a x4 or better cover .. eg you want to borrow £230k ? you need to put down £30k cash and have a job that pays £50k and NO other ‘big’ loans outstanding).
The ‘buy to let’ market has frozen over .. it’s almost impossible to get a buy-to-let Mortgage unless all your other properties have lots of equity and the rent is covering the Montage repayments by +20% or more .. some lenders are demanding you put down 30%+ deposits on any new purchase … (there seems to be a Market expectation that house prices will fall by up to 25%).
The real ‘killer’ is that the house market has ‘stopped’ .. the only sellers are those who are forced (due to debt) – and the buyers are either holding off for prices to drop further or demanding big discounts off asking prices right now. I know one Estate Agent who used to sell 5 or 6 properties a week has sold only 1 in the last month and has no prospects on the books at all right now …
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Mortgage Adviser friend just got made redundant from an Estate Agency.
We haven’t found ANY problems for qualified buyers to get loans. However, you will need a down payment. FHA is 3% (3.5% after 1/1/09). Conven loans are 5% down (or 10% down if you are in a declining market). VA is 0%.
What we have found is that lenders are REALLY REVIEWING EVERYTHING. So have your paperwork in order.
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Real Estate Guy:
That’s exactly the situation…buyers have to be "qualified" now. They used to give credit to just anybody!
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