Buying a Tucson home could require more cash upfront.
Friday, February 8th, 2008Many mortgage companies have started programs to outline what type of risk a home mortgage contains dependent on the zip code. This translates to home buyers having to pay an extra 5% or more on their down payment. For some home buyers this will keep them on the sidelines as an extra 5% of a $200,000 home is $10,000. With tightening lending standards this could mean buyers may need to come up with 25% or more!
These new standards can be attributed to the declining market conditions, the multiple month supply of homes on the market, and many home owners ready to walk away from their homes. As banks try to avoid getting caught with a mortgage balance more than the value of the home, these lending practices become a self fulfilling prophecy. Many want to be homebuyers do not have the additional 5% down payment so they will sit on the sidelines. The homeowners trying to sell their homes have no buyers so they will be forced to lower their prices, thus bringing down the average home selling price and turning many homeowners upside down on their mortgages.
In another note, the National Association of Realtors has changed their prediction of prices being flat in 2008, to a slight decline of 1.2% This is still the most optimistic prediction of several investment firms. Merrill Lynch has a 15% drop in home prices this coming year, while many others think 15% will be a minimum drop. This could leave even more homeowners with mortgage balances exceeding their home values.
It’s not a pretty market out there, but if you need to sell your home and if you believe you are upside down in the market, then we can help you. WeBuyTucsonHomes.com is an investment company that specializes in helping homeowners that need to sell their home quickly. We have multiple years experience in dealing with banks and homeowners who are in a situation that calls for them to sell quickly.