Buying a home these days is not as easy as it was five to ten years ago. Years ago you could walk into a mortgage broker’s office; lay down your bank statements and paystubs and walk out with a loan.
After the economy crashed banks have been learning a lot. They learned that handing over money to just about anyone was definitely not a good decision. They learned that no money down programs opened the doors to many people that otherwise, would not have been able to afford a home; were now able. They had no fear when it came to late mortgages because they assumed that they were going to make enough money off of the few that did pay up to make up for the many that couldn’t. Banks learned that no matter how scary bad credit is a homeowner can still cave during a bad economy.
The problem is; they learned this too late. Now with a mass amount of short sales and foreclosures surfacing the homeowners are not the only ones caving. If only someone could have put a halt to this and thought it out long before it became a tragic lifestyle. There are so many out there that have a dent on their credit score and a horror story to tell. Many have found that the renting life may not have been so bad; due to the freedom to downgrade to a smaller home at the drop of a hat or at least as soon as the lease was up; when times got tough. Dealing with the landlord instead of a big bank seemed all so trivial looking back. Sure, when going through the mind torturing process of a short sale or foreclosure, renting seems humbling and degrading, but truly there is no shame in doing your best. Those who go through this tragic crisis should not be judged.
It is now easy to understand how many banks are just saying no when it comes to tight money. Income to debt ratios have become more strict and the days of zero down loans are becoming obsolete. In fact, the only zero down loan programs are available to rural areas and low income families. Banks are tighter with there money now, which is completely understandable. It can take more than two months for an average home sale to close a in our current economy. Closing is now a more drawn out process than it used to be. You can’t just turn in your documents anymore and close with in a month. The banks are taking their time now, after a hard lesson learned, and double checking everything. In reality they should have done this in the first place. They should have screened with a tighter weave from the beginning. Would you let just anyone borrow your money? No, we’d all get signed documents and maybe even hire a lawyer to draw them up properly.
Buying a home is still a way of life and definitely not impossible. Although, if you are looking to move in with in a few weeks you are out of luck. Patients is the key factor for new home owners right now. Clear your schedule and prepare to hang out in limbo for a few months. In fact, if anyone is interested in purchasing a short sale or a bank owned home, this process can even take longer.
Unfortunately, if the banks keep holding the reigns tighter and tighter, more and more buyers are going to feel the process is just too overwhelming and choose renting over buying. This will lead to an even worse housing market and things will continue to spiral downward instead of a steady path to recovery. The banks still need to be stringent, but at the same time they need to figure out a better plan for retrieving information from the home buyers.
If the home buyers were possibly given a preparation consultation, this may help them by informing them of the process needed to complete their purchase. Most of the stress and frustration and home buyer endures comes from the unknown. As a home buyer myself, before I became a Realtor, I remember confusion and misunderstanding about the whole situation. I wanted to understand what was going on and who was deciding my fate. Luckily it was all over quickly and I didn’t require the patients that home buyers are going to need in todays market. I have come up with a mini consultation myself for my clients. I want my buyers and sellers to understand the entire process. I tell them, "Ask questions!" That is what I am here for.
On a scale of one to ten; one being impossible and ten being handed to you on a silver plater. Compared to five years ago, buying a home in today’s market is at a level four. Don’t let the loan companies hold you back. The market needs buyers to balance out the housing industry. If you are interested in buying ask questions and get answers. Don’t let stress and frustration keep you from owning a home. The resources are at your finger tips and you only need to find a good Realtor, a good mortgage broker, and a home. Then ask questions!
