Brace Yourselves – There will be NO surge in House Sales

Federal crackdown could spark housing sales
The real estate industry is bracing for a surge in home purchases,
betting buyers will rush to get ahead of tighter federal government
standards for the mortgage industry.The Finance Department will stop
guaranteeing 40-year and zero-down-payment mortgage loans starting
Oct. 15.

No Surge In Home Sales on the Horizon

No Surge In Home Sales on the Horizon

Hard to believe this is what the media and even some industry players think will happen because of the government change. When I was putting together residential mortgage applications, I had less than 10% going with the 40 year amortization. And I did not have 1 application who went with 100% financing, no money down. Now, this is not to say nobody did these deals, but really, in the grand scheme of things, is this really going to all of a sudden create a “surge in home purchases” before Oct. 15th?

Highly doubtful in my opinion. It may light a small fire and push a few properties to sell a little quicker than they are currently, but given the very small percentage of total purchasers that use these products, I highly doubt you should quickly list your house to capitalize on this upcoming change. As it stands, some banks/lenders are eliminating this program long before the Oct. 15th Federal date. Thus, stopping a “potential” rush of people applying for these products. Of course, this is just my opinion, I welcome your thoughts on the matter!

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Filed under financing, real estate

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