Poof. Just like that.
Most lenders have labeled Maricopa County as a “declining market” over the last few months, and had reduced their allowable loan-to-value ratios accordingly – generally by 5%. This means that lenders who would normally make a mortgage loan to a buyer at 100% of the purchase price were now reducing that to 95% of the purchase price, requiring 5% as a down payment.
Last week Wells Fargo Home Mortgage followed suit, and pulled their 100% loan program from the Maricopa County market. Yesterday, U.S Bank did the same, effectively eliminating 100% financing completely.
If any lenders out there know of another option, please share in the comments below!
My guess is that these loans will come back, but not anytime soon. The banks will wait for both our real estate market, and the mortgage environment in general, to stabilize first. When these loans do come back, I expect the underwriters to be extremely cautious with their decision-making.
In the meantime, this might make FHA loans the best game in town. (and we happen to know an FHA specialist…)
Your sad to see them go Realtor,
Chris Butterworth
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March 11, 2008 at 11:22 am
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February 28, 2008 at 7:12 am
Shailesh Ghimire
Chris,
Also VA is a 100% program as well. This is of course only for veterans. However, still there are a lot of qualified veterans out there. Additionally, there is the home in five program (if your income qualifies) that provides 5% down payment assistance. This loan can be used in conjunction with a specified Fannie/Freddie loan type. So, there are still a few options out there. Just not as great a selection as before!
February 28, 2008 at 12:16 pm
orlando fl remax
I think it will definately not be before the market stabilizes and I’m not even sure then. I think lenders will be working on this for sometime and have many ideas but for know you’ll need a good size downpayment same as you would if you went to a bank and many people are going to realize that maybe a better option than lenders.