As of the end of March, 0% financing is pretty much a thing of the past. At least for now….
I find it increasingly difficult to answer questions about mortgage rates and what is happening in the mortgage industry these days. I pride myself on keeping on top of the latest trends and news, however I can’t keep up any more! I find myself referring clients to a trusted mortgage lender to answer their questions simply because things change on a weekly (sometimes daily) rate.
One of the changes coming at the end of this month will have a large impact on home buyers. It is the going away of 100% financing. For conventional loans you will need at least 3% down, for FHA loans I believe it is 1.5%. Of course, there are options like the 80/20, but restrictions are much tighter and most will require something down now.
Personally, I do not think this is necessarily a bad thing. Part of the reason we are in the situation with the foreclosure problem is that lenders gave loans to people who really couldn’t afford them. As a Realtor, I think it is irresponsible to not at least discuss financing with your buyer. Ultimately it is the buyers decision of what they can afford, but if your experience tells you someone may not fully understand the true cost of owning a home (ie. closing cost, taxes, repairs, insurance, etc..) these are things that should at least be discussed as a means of educating your buyers. Perhaps if more Real Estate Agents took on this responsibility the market wouldn’t be in the shape it is in now?………
