How Difficult Is It To Get A Loan These Days To Buy A Home? It Depends...Really
So where are we with lending these days? The answer to this question is obviously now a huge part of real estate and has become for many the provincial thorn in the side with regards to a real estate transaction. We all read plenty of stories online, in the newspapers and magazines and hear our fair share of first hand accounts about the realities of lending these days. So here are my 2 cents based on personal experience with clients and stories of other agents and their clients in the last 6 months.
The Conforming Loan up to $729,000
For the most part, if you are a buyer with a secure job, 20% as a down payment and fit within the ratios of the lender requirements, a loan up to $729,000 is pretty easy to come by. For most it is pretty much "back to normal". All lenders that my clients have used in the last year have also pretty much been of the same opinion...a loan up to $729,000 for a qualified client is pretty much a done deal.
$729,000 up to $1 Million
Here is where it gets a little more difficult. Once a buyer crests the $729,000 mark up to the $1 million mark, everything changes. Still in the end most buyers that are qualified are getting these loans, but with a lot more paperwork, effort, stress and time. Many lenders have expressed that these loan amounts are similar loans as up to $729,000, but with just a few more sets of eyeballs reviewing the buyer and a ton more paperwork. In the end in my personal experience, these loans are getting done, but take a lot more effort and time.
$1 Million and Above
Here is where the lending picture takes a turn. Even to the most qualified clients, banks are just nervous in lending more than $1 Million. I have recently had 2 clients with loans above $1 Million that have just been put through the ringer with the amount of signatures, duplicates/triplicates etc., reviews, you name it. These are also clients that are putting 30-50% down, have great income as well as substantial other assets. The loans are out there, but the scrutiny is almost too much. I know of certain agents that have had clients walk away from deals simply because of the effort to obtain the loans. In the end the lenders are coming through, but you simply have to be ready and willing to deal with all the eyeballs that review the files and the amount of times you might have to sign a document. Lenders are anti-risk these days and any loan above $1 Million poses "risk to them in their eyes". Further Reading:
- Santa Barbara Cort Reports Jan 2011
- What Does $1 Million Buy you in Today's Market?
- Montecito 2010 Year End Sales Stats
- Santa Barbara 2010 Year End Sales Stats
- Santa Barbara Ocean Front Areas
- Santa Barbara Luxury Real Estate
Thank you for reading. I hope you find Santa Barbara Real Estate Voice informative. Please feel free to contact me or comment below with any thoughts. For more information on Real Estate here in Santa Barbara, Montecito and/or our surrounding areas, as well as any other aspects of life in the Santa Barbara area, please don’t hesitate to contact Kevin Schmidtchen at Sotheby’s Int’l Realty. Subscribe: To Receive Personal Listings of Santa Barbara Real Estate Search: The Santa Barbara Area MLS