Although the sub-prime meltdown has shaken up the housing market there are still great opportunities out there to use 100% financing and leverage yourself so that lenders are taking all of the risk in your home purchase.
The sub-prime loan which helped fuel the ability to buy a home in the boom of the real estate market in 2001 to 2004 has disappeared from the scene. Homebuyers in Southern California still have many options to purchase a home with no down payment. For the veteran buyer VA programs offer a 30 year fixed loan with zero down payment that is backed by the federal government, and will even allow for structuring 4% of the purchase price to be paid off in consumer debt. Additionally for a veteran buyer looking for a great interest-rate the Cal-Vet program offers a 5.45% 30 year loan up to the conforming loan limits of 417,000. For veteran buyers who are looking for a larger home in a more expensive price range up to $521,250 the Cal-Vet program has the answer with a program that has a rate of 6.55% for a 30 year loan.
Even if you are not a veteran or an active military member, the state of California offers through their CalHFA program 100% financing under a conventional loan up to $543,859 with their first time home buyer program. As with any first-time home buyer program there are limitations on income. If you have less than stellar credit the FHA loan combined with CalHFA will allow you to purchase with the 0% down payment by using the silent second program CHDAP for the 3% down payment product. If you don't meet the guidelines for these programs there is still FNMA’s line at 100% financed loan programs. They offer both the Flex-100 and My Community programs both with liberal underwriting guidelines.
With the falling prices in San Diego's real estate market, and in some cases bank owned properties selling at 30% below the peak of the market price, consumers have a window of opportunity to buy a home with a low interest-rate and 100 percent financing readily available. Mortgage default rates dropped 31% in the month of November in San Diego County signaling the start of a reversal in the default rates. Combine this with President Bush's new plan to freeze the adjustable mortgages for a five year term, and this window of opportunity will be changing quickly. The wise consumer is now taking advantage of these three conditions rather than waiting for the news of a turnaround in the markets to purchase and missing the bottom.
The Window of Opportunity for San Diego Homebuyers Quickly Disappearing.
There market can turn on a dime. The signs are already there, multiple offers and short market times are signaling a change. Many buyers will be caught unawares as the market changes and the opportunities to buy bank owned homes diminish.
Is the Bottom of San Diego's Real Estate Market Here?
There has been much speculation about the length and depth of the current market slump. Many homebuyers are sitting on the fence waiting for the bottom of the market and may lose one of the best opportunities to buy below market for the next 10 years.
Could Sub-Prime Lending in California Turn Deadly?
There are many consequences to the sub-prime lending meltdown. People losing their homes, financial markets faltering, but who could have expected that it could lead to a deadly epidemic.
