Mortgages in Cherry Creek
November 15th, 2007 Posted in Real Estate
Many people have asked me if all the mortgage problems we are seeing in the press are going to make it harder to sell a home in Cherry Creek? The answer is yes and no. How is that for being politically correct.
There are two major factors that are going to effect possible buyers in our neighborhood. The truth is that the mortgage industry made it very simple to buy a home with no money. Good credit or bad credit we could get it done. In the past if you were going to be buying a million dollar plus property the thought process is that you were rich. If you were rich, than having 20-30% to put down was expected and done.
In the last five years with the advent of all sorts of very aggressive loan programs we got to where we could offer 100% jumbo financing options at rates that were very competitive. So that brought a whole lot of new buyers to the table. The newly promoted individual, the person who just got the raise or just landed the new sales commission job. They did not save anything yet but their income would cover the payment. It also allowed the person who made a ton of money and spent a ton of money every month and had no savings to be a buyer.
So, today with the credit crunch we are going back to the past. Down payments are now required again. 10-20-30% are going to be required based on your profile.
Part two of the changes is the disappearance or extreme tightening of Stated Income loan types. Stated income loans were originally created for the business owner, CEO, doctor or sales executive who made a lot of money but had very complicated tax returns. (sound like your neighbors?) If you had great credit we would let you state your income and we would believe you. The problem we had in the industry is we kept expanding that program and eventually allowed very bad credit individuals (580 FICO) to get 100% financing with stated incomes. No wonder we are in this trouble!
Well those loan types are our biggest problem in today’s foreclosure market so they are gone or very difficult to get.
Both of these issues will shrink the pool of buyers in Cherry Creek. So why did I answer the question yes and no? Because our neighborhood is strong enough to get buyers that can qualify in the traditional way. I am still doing loans everyday and people are still buying and selling everyday.
To contact me post a comment, call 303-905-8280 or visit my blog site www.1760mortgageguide.com
