Times are changing. This is made even more evident by the recent steps taken by the mortgage lending banks to assist homebuyers interested in purchasing a home. Since the recession began, it has been notoriously difficult for homebuyers to get approved for mortgage loans. In an effort to increase mortgage loans, banks are allowing buyers to make down payments as low as 3%, among other changes.
With the rise of foreclosures in the mid to late 2000s, mortgage lenders increased their minimum down payments required for a loan, quite drastically to 20%. While this makes financial sense, due to the decreased risk of having the property value fall below the balance of the loan, it’s simply not feasible in cities with high average rents.
Of course, mortgage lenders will be reviewing applications thoroughly, checking credit history and financial stability, but this is overall good news for anyone in the market for a home. Aside from lowering minimum down payments to 5% or 3%, the lenders are also allowing down payments to be made by the borrower’s relatives.
There’s no question that economic recovery has taken an extended period of time, but last year we witnessed major improvements and this year is projected to keep the gaining momentum. Florida, in particular, has felt the effects of the foreclosure crisis more heavily than most other states, but we hope an over all improved economy and more loan approvals will further boost home sales and allow for more people to become more financially grounded.