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We are in FL and I keep hearing that banks don't want to finance anyone. I was told due to the large amount of forclosures they are being very, very strict. Maybe, this is the part of the reason everyone is having such a hard time selling. Has anyone else heard this?
Well, my buyers aren't having any trouble. It depends on the bank, the buyer, their credit score, their circumstances and $$ they have in hand. Also depends on which region in Florida you are talking about. Many lenders, for particular areas, are requiring more money down...say in the county above me, a standard 10% down for a 2nd home becomes a 15% down in my own county.
Our buyers had no trouble either - a couple in their early 30's - had 20% down and a good monthly income and no debt....if you have those things, it should be no problem.
"Trouble" depends more on the borrower - there's money to lend - but it's definately not like it used to be. Borrowers will have to produce documentation verifying income. Yes, they'll have to demonstrate they can repay the loan - I know, I know hard to believe in Florida. (I'm not picking on you, just the lending history/situation)
If one has a credit score below 625 they'll have to put more down. Even with a score above 625 they'll also need at least 10% down unless they get FHA financing - which is still available with 3% down but there are loan limits on FHA loans - although they were just raised in 1st quarter to over $300K.
We're seeing borrowers get approvals, they just have to have more "skin in the game" than lenders used to require. We're also seeing seller's carry back second's.
Last edited by ntfeldman; 07-08-2008 at 07:13 PM..
I think Banks are being careful on who they are lending money too.My loan officer told us they require a min credit score of 680 for VA Loans & they require a higher credit score for conventional loans plus money down.
We are in FL and I keep hearing that banks don't want to finance anyone. I was told due to the large amount of forclosures they are being very, very strict. Maybe, this is the part of the reason everyone is having such a hard time selling. Has anyone else heard this?
There seem to be a lot of deals falling through due to financing problems, but then again, some former neighbor friends of mine just bought their first house and they frankly don't have 2 pennies to rub together and have had money problems for years. Don't know how they pulled it off, but apparently it's still possible.
Depends on where you are and what the loan is for. We have a client right now who has over an 800 credit score, good, documentable income, and low debt, and he was told by several banks that they would require a minimum of 30% down on an investment property he wanted to buy.
We are also only getting 70% LTV (loan to value) on our construction loans right now for building houses, and we have excellent credit as well and are not overburdened with loans.
Being in Florida you may remember Hurricane Andrew (I believe) that did so much damage. I recall State Farm Insurance quit writing coverage in areas where they had too large a piece of the market to limit their exposure. The ripple effects even hit us here in TX.
Maybe something similar with the lenders in high foreclosure areas.
Another Lending Hurricane has wiped out some good creditors.
Depends on where you are and what the loan is for. We have a client right now who has over an 800 credit score, good, documentable income, and low debt, and he was told by several banks that they would require a minimum of 30% down on an investment property he wanted to buy.
We are also only getting 70% LTV (loan to value) on our construction loans right now for building houses, and we have excellent credit as well and are not overburdened with loans.
That is because lending on investment properties and on construction loans has WAY more risk to the lender than someone buying an existing property as their primary residence.
To the OP, it is a complete fallacy that banks/mortgage lenders don't want to lend. It is however, ture that lending guidelines have been tightened up quite a bit compared to the last few years of way 'too loose' standards.
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It is tougher but still can get done
