Homebuyers Face Tougher Loan Challenges

July 15, 2008 10:41:21 AM PDT
Changes in the home buying process are testing everyone's patience, whether you are buying, selling, or just work in the industry. The changes help protect Freddie Mac and Fannie Mae. Buyers hoping to realize the dream of homeownership are finding it much more difficult to get pre-qualified. It's also taking much longer just to get through the loan process.. Fresno realtor Linda Davis said "Let's say you don't have perfect credit, it could be three months to do what used to take thirty days."

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.
-----------------------------------------------------------------------------------------------

abc30 News Links:
Links to other news sections on our website.

-----------------------------------------------------------------------------------------------

Breaking News Alerts:
Click Here to Sign-Up for Breaking News E-Mail Alerts
Receive Breaking News alerts in your email inbox.


Click Here to Sign-Up for Text Message Alerts
Receive Breaking News alerts right on your cell phone.


-----------------------------------------------------------------------------------------------

Load Comments