Digging Deeper: Huge down payments - WALB.com, South Georgia News, Weather, Sports

Digging Deeper: Huge down payments

Tighter lending rules could drive some potential buyers out of the housing market. South Georgia realtors say the inventory of "for sale" homes is up, but buyers who qualify are somewhat scarce.

If you think people aren't upside down in their mortgages here in south Georgia, think again. Realtor Patsy Martin has seen it this year. "When they had to sell they had to bring as much as $50,000 to closing to pay off the mortgage because they were upside down."

A former banker, she believes that doing away with some programs that offered no money down home loans or interest only loans with balloon payments and new requirements for 20% down are good.

"I can't really fault that a lot, I like for the home owner to have some investment be it closing costs or 3.5% down payment."

For low to moderate income buyers, they can get caught up in some of the tougher restrictions. Realtor Jackie Dixon recounted a story where a buyer initially qualified with a credit score above 620.

"Over the course of the 30 days processing the loan, the mortgage company would pull the credit score and every week the credit score would decrease slightly from having it pulled, no other changes in the credit, this person made no other purchases," she said.

They lost the loan. Digging deeper we learned in south Georgia home values have decreased as much as five percent as a result of foreclosure sales and inventory is up because many can't qualify. In Lee County higher priced homes are available

"65 homes for $200,000 to $230,000. Riverpointe, there's a couple of lovely homes in Riverpointe. I think there's 16 listings, soon to be 17," Martin said.

Realtors still contend it's a buyers market and if you've saved up the cash and can put 20% down, you're sitting in the catbird seat and can negotiate with lenders and owners to get a good deal on a home. 

Realtors say banks are being strict and requiring appraisals for every sale. They say when area foreclosures are included in the appraisals, it drops the value of homes.


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