Seller Financing
Recently the Bank of America CEO spoke at an investor conference, suggesting his firm has little incentive “to try to create more mortgage availability where the customers are susceptible to default.”
One of the most common complaints about the mortgage market today, is that over-tight lending standards have cut too many potential homebuyers out of the picture. This is also a commonly cited problem younger first-time homebuyers, who, in addition to facing tight mortgage criteria, also have to clear the hurdle of saving for a down payment.
This policy confirms two options in the market place. Seller Financing sometime referred to as Seller Carry will become more mainstream in three different ways. Normal seller financing where the property is conveyed to the buyer who has a sizable down payment approaching 20 per cent and if not opens up for delayed closing and or lease options. All of which gets the buyer into the home of their dreams verses just paying rent.
While the CEO suggested the B of A approach “doesn’t sound good for an instant housing recovery and faster housing markets, because in the long term it keeps housing more fundamentally based,” seller carry will help to meet the market needs.
Recent stats from Ellie Mae suggest over 50 per cent of potential buyers do not qualify for mortgages at this time.
Therefore it is up to realtors, realtors in the Phoenix metroplex to encourage this opportunity to help strengthen and grow the Phoenix real estate market. This also applies to the res of the U.S. market.