Nov 28, 2012

Today's Home Buying Hurdles

Now that Dallas real estate has turned into a seller's market, hopeful home buyers are facing more challenges. The two biggest hurdles to buying a home in today's market are:

  • low inventory of homes for sale
  • difficulty getting mortgage financing
The graph below shows the available inventory of North Dallas homes for sale as of today.
 
Lending conditions continue to be tight. The most important factors to getting a home loan are credit scores, debt-to-income ratios and down payment. A recent survey of bankers conducted by the Federal Reserve reveals which factors are also driving the banks’lending restrictions.
 
Bankers indicated that their biggest concern was “put-back” risk with 84.2% of respondents indicating that it was important to some degree. In recent years, lenders have been forced to repurchase loans sold to the FHA that have defaulted and been shown not to comply with the original agreement between the FHA and the lender regarding the quality of the loan. Concerns were also high about the “compare ratio”, an FHA formula used to measure how well a lender scrutinizes loans relative to other lenders. A high compare ratio would indicate that loans originated by a particular lender were defaulting at a higher rate and might result in a penalty for that lender.
[where: 75230]

1 comment:

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