Buyer Affordability--Lower Prices vs. Getting A Loan

The good news is that more buyers don't need as much annual income in order to qualify, but what about loan qualification?

First of all, price drops are out there, especially with condos. If a condo is for you, this is the time to start examining your options. Right now, a qualified buyer could find a one-bedroom condominium in Belmont Heights for as low as $190,000 with dues at $252/month, and downtown prices start even lower at $75,000 for a studio with dues at $126/month. If you prefer a single family home, try a lovely 2 bedroom/1 bath home in Lakewood's Carson Park area (no REO or short pay) for $349,000.

The really good news is that the qualifying income needed is also much lower than a year ago: $62,870 annual income will now buy a home selling at $329,000, so even less income will be needed for that one-bedroom condo. See the August 19 affordability report from California Association of Realtors for the second quarter of 2008.

But next, suppose you don't have a lot of cash saved up for down payment. Let's face it, mortgage lending is returning to more traditional parameters, with the departure of lenders both large and small, the Bank of America takeover of Countrywide being one example. But 3% down is still possible for an FHA loan, which will also allow a family member (only) to assist on the down payment. Otherwise, the vast majority of conventional loans are leaning towards 10% down payment. On the other hand, there are still-valid down payment assistance programs through local cities such and Long Beach, Los Angeles, Bellflower, Buena Park, Irvine, La Mirada, Westminster, plus other sources such as ACORN, NHF Access, CalSTRS, CalHFA, and various neighborhood housing services and credit unions in Los Angeles and Orange Counties--keep in mind these programs are often driven by income levels and geographic location. However, programs allowing down payment contribution from the seller, such as the HART, are no longer allowed after the end of September.

If you would like to find out how you might be able to qualify for a loan, and one of these programs, call or e-mail me.