The reason? Loan Officer Paul Salazar says lending institutions are now imposing much tighter requirements. Salazar said "The requirement's a higher credit score, more documentation. In fact, full documentation opposed to the exotic loans like stated income." Your credit score is now more important than ever, Salazar said "Two years ago a 620 would get you a loan and a very decent rate. Now you need anywhere from a 640 to a 680 to get that same rate."
Davis says while the market is still down, she is working with a lot of first-time homebuyers and investors. She said "You don't always know when the lowest part of the market is until it has passed and I think it may have passed."
But you'll find securing financing for that home difficult because lenders are looking to reduce their risk. It's certainly not as easy as it was two-to-three years ago. Salazar said "Consider lending like a big watering hole. There was a huge vast of lenders that were lending money left and right. Now that watering hole has shrunk to the point where its harder because everyone else is going to that same water hole."
Davis says on average homes now are staying on the market for 2-3 months, some as long as six months before they sell.
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