Summer in the City - The Heat is On When it Comes to Mortgages

Supposedly it is summer in the city...if it ever stops raining! The biggest problem for buyers in this late Spring/early summer market is getting a mortgage. This is creating tremendous stress throughout the industry. Well-qualified buyers can no longer get the same generous loan terms that were available a year ago. Less than 20% down is a problem if a buyer's credit is less than stellar. "Piggy-back" loans to avoid PMI (private mortgage insurance)are non-existent. Many sellers are chosing buyers with more down, even if they are offering slightly less than a competing buyer. Believe it or not, bidding wars are still taking place but now because some condos are so well-priced that the listing creates that kind of excitement...sellers are finally facing the grim reality of the market.

The good news for lower end buyers is that the rules for FHA loans have been greatly relaxed and are much more attainable. Buyers who are borrowing less than $417,000 can put down as little as 3.5% and qualify for a mortgage.

Mortgages are attainable however...do not fear! But good credit and a larger than 10% deposit will greatly improve a buyer's chances of getting a loan, however, loans are taking much longer due to greater scrutiny by the lenders.