Ken's Naperville Real Estate Blog : WHO WILL BE ABLE TO BUY A HOUSE?


What will the mortgage business be like in the future??

Who will be able to buy a house?

With many would be homebuyers falling behind on various payments, credit ratings across the country will be falling.

So who will be able to buy?

As the world digests the mortgage issues we are facing today, cash, not credit, will be king when it comes to who can purchase a home and who cannot.

What do I mean???

If I am a mortgage company looking at a potential borrower, although I like a high credit rating, I feel even safer if someone is able to come up with a large downpayment.

Gone are the days of 100% or even 110% financing.  Hopefully at least.

You have 20% to put down?  I will loan you the rest.

You have good credit?  Well then you better have at least 10% to put down.

The large downpayments will convince me, the mortgage company, that even if I need to foreclose, I will still be able to get my money out of it. 

I can sleep with that.


To search for a home, go to my website anytime.

Comment balloon 12 commentsKen Tracy • July 22 2008 03:37PM


So will be interesting to see...Right now it has been hard to keep up to date on all of the mortgage changes while being on maternity leave.

Posted by n d (Naoma Doriguzzi) almost 11 years ago

Right now, the mortgage market is artificially tight.  It will loosen up!


Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 11 years ago

The downpayment issue is important - I believe the lack of needing one these past few years is what has caused most of this mess. I think it has also been a huge factor in the increase in short sales. People have zero equity and are upside down when selling.

Posted by Susan McQuaide (Keller Williams) almost 11 years ago

I think there will be loans but one should have good credit and at least 10% to put down.

Posted by John Walters, Licensed in Louisiana (Frank Rubi Real Estate) almost 11 years ago

The real estate market won't recover until mortgage lending loosens up. There are a lot of good buyers out there who don't have a big down payment, but they do have a history of good credit and income enough to pay back the loan. If it weren't for FHA these borrowers would have no option. There was a lending mania over the last few years and guidelines were thrown out the window. Too many people who shouldn't have been home buyers took on loans they could never afford. Now we are at the other extreme and lenders are hesitant to lend to even good borrowers. We will get through this, but I doubt if we will recover before the end of next year.

Posted by Peter Thompson, Chicago Mortgage Insight almost 11 years ago

Hi Susan, John, and Peter.  Thanks for stopping by and adding to my post.


Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 11 years ago

Morning Ken,

There have been home buying plans in place for years and for the most part foreclosures were at a minimum. I remember FHA 235 for one, it helped first time home buyers and subsidized their monthly payments based on income. What the market offered these past few years, in my opinion, promoted the fiasco we are currently dealing with. Mortgage money will be available again, but hopefully the to qualify will be more in keeping with sound business practices.

Posted by Harold "Hal" Place (A1 Connection Realty, Inc.) over 10 years ago

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Posted by Jack Tapping (Fizber) over 10 years ago

20% down! Yikes - that would be scary.

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) over 10 years ago

Hi Hal, Jack, and Greg.  Thanks for stopping by.

These are indeed interesting times!


Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) over 10 years ago

Smart observations.  That is what lies ahead in real estate.  This isn't the end of the world, we are heading towards normal again.  This is the way it should be.

Posted by Jim Crawford, Jim Crawford Atlanta Best Listing Agents & REALTOR (Crye-Leike REALTORS®) over 10 years ago

Hi Jim.  Thanks for stopping by.  Hope all is well in Atlanta.


Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) over 10 years ago

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