Financing a Home Sale
Times are scary now, many people don’t know whether they will still have a job next month let alone money for the house payment, food, bills, etc. Because of the fear of the unknown, people are hoarding what they have and turning to other methods of getting what they need. Thus, people are saving all their money, some may have it in the bank, trusting the FDIC to keep it safe, a few may put some in the stock market hoping for a nice profit when things turn around, and some may have it in their mattresses. Wherever it is, people want easy access to it in the event something happens.
One group of people that has been hit particularly hard during this recession are retirees. These are people who usually live on a fixed income from the government and supplement it with part time jobs or savings that they invested previously in their lives. However, many of these are faced with a situation where their savings and investments are worth pennies on the dollar compared to what they were worth just a couple years ago. The snowbirds of Florida are now stuck with two houses that have declined rapidly in value, a reduced income due to savings and investments disappearing, and very few job opportunities. As a result, many are trying to sell one of their homes, but in this market it is difficult to find a buyer and even if they can find one, the buyers aren’t willing to pay the same prices they would have paid a few years ago.
Another issue that has arisen recently is a difficulty in getting financing. Conventional bank financing now requires larger downpayments for purchase of properties rather than the low downpayment mortgages that avoided PMI or required PMI for the mortgage. Thus, unless a purchaser has a downpayment amount of at least 10%, although 20% is preferred, the purchaser will have difficulty getting a conventional loan. The seller may consider seller financing. Many sellers may not have the expertise or want to deal with this option though.
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[...] Financing a Home Sale : Fix My FinancesAnother issue that has arisen recently is a difficulty in getting financing. Conventional bank financing now requires larger downpayments for purchase of properties rather than the low downpayment mortgages that avoided PMI or required … read more… [...]