Mortgage Financing is Available! Affordability is Good!
If you read or listen to the national media you would think that mortgage financing was very difficult to get and that an escalation in average selling prices, which affects overall affordability, has forced investors and first time buyers out of the market. Perhaps, because the media is centered so heavily in the northeast and there is some obsessive fascination with the high priced California coastal markets, conditions on the coasts become sort of a generalized description of the national market.
Well, it’s not just the weather in Michigan that’s different than the coasts. Here in greater Lansing, mortgage money is readily available to credit worthy buyers. These are not the bubble market days of “liar loans” (no income documentation) or 110% loans. It is a time of more prudent lending, but banks have lots of money to lend and are eager to put it to work. If a buyer has a job and can verify steady income, has a 620 or higher FICO score, and has reasonable debt to income ratios there is a wide variety of mortgage products available, some with as little as 5% down. The key is to consult with a loan officer from a reputable local mortgage lender to see what product will best fulfill your needs.
Though average selling prices increased last year and continue to increase this year, that statistic is driven somewhat by significantly fewer distressed and foreclosed properties coming to the market. Individual markets have not appreciated at the same rate and some have not appreciated at all recently.
The media would have you believe that investors have left the market and first time millennial buyers can no longer afford to escape their parent’s basement and take the plunge into what remains “The American Dream”. The fact is that, here in this market, the average priced home is well within the reach of any person making what the average household income is here in greater Lansing.
The profile of the real estate investor has changed however. Bulk property buyers have declined but more and more individuals are choosing to move more risky paper investments into tangible real estate for current income and price appreciation.
When all said is done, affordability in greater Lansing is very good and mortgage financing is readily available. Average prices have not risen to the bubble days of 2005-2006 so there is still room for price appreciation. Home ownership remains the surest way to wealth accumulation and the desire to experience the emotional benefits of ownership are strong.
It’s a great time to make your move.