Hot Market Presents Blessings and Challenges

Mortgage loan, mortgage ratesAs the South Florida real estate market continues to heat up, local home buyers are encountering many challenges in the path to home ownership. Securing a mortgage loan has become difficult as lenders tighten their standards, and the rash of foreign investors combined with low inventory has created an interesting environment.

For those looking to sell their homes, the hot market has produced good and bad results. Sellers are unloading their homes in mere days or weeks, even when they include a long list of demands, including 10-20 percent down payments, large deposits in escrow, and quick closings, as well as declining offers with FHA loans and requesting the bypassing of an appraisal, which could potentially bring the sale price down if the appraisal doesn’t match the asking price. Sellers are also getting close to, if not more, than their asking price.

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Banks Making it Harder to Secure a Mortgage

Mortgage rates that have been stuck at historical lows for quite some time have gotten the attention of many a prospective homebuyer. Naturally, consumers think this is a fantastic time to buy a home when mortgage rates have been hovering around 3-4 percent for a couple of years now. But these days, mortgage lenders are denying plenty of Americans the opportunity to mortgage loan due to perceived risks.

Along with historically low mortgage rates have come much stricter standards that are used to determine whether a prospective buyer will qualify for a mortgage loan. Here are some of the things lenders are looking for:

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