Think Mortgages Are Hard To Get Now?..Just Wait
Life Without Fannie and Freddie
March 20, 2011
Mortgage requirements are going to become significantly tighter…think, larger down payments…higher credit scores….and few surprises…read on.
As we have been reporting on this site for well over a year the governments take over of Fannie and Freddie will result in a more ‘conservative’ approach to home loans.
On the surface, its hard to argue that lending requirements need to be stricter. Afterall, isn’t loosey-goosey lending standards the chief cause of this house depression….(that is what we have been told, afterall)
If you have buyers who are on the fence…waiting for prices to fall, more homes for sale…etc…tell them that lending requirements are changing.
Example of what we expect:
Conforming loan limits to be lowered. I have heard that the NATIONAL limit may be lowered to $427,000…and I have also read that the limit will be $629,750 in the most expensive markets. Time will tell.
Non conforming mortgages will require 30%+ down.
Conforming mortgages will require at least 10% down.
And the biggie…..it seems that there is building momentum behind doing away with 30 years mortgages. In case you didn’t know it, only in the US and Norway do 30 year loans exist. In most of the world you have fewer than 10 year mortgages and its normal to put 50% down.
From: http://realestateinsidernews.com/breaking-real-estate-news/think-mortgages-are-hard-to-get-now-just-wait-life-without-fannie-and-freddie/
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