Declining Markets - On the face I would assume that we could categorize this market over the past year as declining. That makes sense! However, that term actually means something more to your lender. GIVE US MORE MONEY!
When you buy a home you may think that if the appraisal comes in at a good value (at or above the sale price) you will be on the right road to closing and owning your first new home! Well, hold your horses. If the home appraiser categorizes your home as being in an area that is a "Declining Market" you may not be able to purchase it with the terms you thought. Meaning you more than likely will have to put more money down on the property! Typically you would not have to worry about this going FHA. However with a conventional loan you will. The lender (Fannie Mae) originally wanted you to put down 5-6 percent. Now that your home is located in a defined "declining market" area you may have to put down 10%! OOPS! Who would have thought of that? How can you protect against looking for a home in those declining market areas? I don't know any realtor that follows that stat! I don't even know of any lender who follows that stat! Getting a loan is a hard-to-do task in this day and age for certain...
When you buy a home you may think that if the appraisal comes in at a good value (at or above the sale price) you will be on the right road to closing and owning your first new home! Well, hold your horses. If the home appraiser categorizes your home as being in an area that is a "Declining Market" you may not be able to purchase it with the terms you thought. Meaning you more than likely will have to put more money down on the property! Typically you would not have to worry about this going FHA. However with a conventional loan you will. The lender (Fannie Mae) originally wanted you to put down 5-6 percent. Now that your home is located in a defined "declining market" area you may have to put down 10%! OOPS! Who would have thought of that? How can you protect against looking for a home in those declining market areas? I don't know any realtor that follows that stat! I don't even know of any lender who follows that stat! Getting a loan is a hard-to-do task in this day and age for certain...
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