According to an article in today’s Wall Street Journal, the entire Chicago region is now considered a declining market by mortgage insurers. A total of four out of five of the largest nationwide insurers gave the market the poor rating.
What does this mean for Chicago homebuyers? When a market is considered to be in decline, many mortgage insurers are unwilling to give a high risk loan that has a chance of resulting in a default. If the owner is unable to continue making payments, the mortgage owner would be left holding a property that is now worth less than what it was bought for.
This means that buyers must now jump through additional hoops in order to get a mortgage. The first change most will notice is a higher down payment. While just a few months ago it was possible to find a loan with no down payment, many buyers must now shell out at least 10 percent of the total price. This shows mortgage lenders that the buyer is more financially stable and also gives the lender some space for prices to fall.
Buyers on the market for Chicago Homes For Sale will face added difficulty as a result of the rating for the regional market.
Technorati Tags: Chicago Real Estate, Chicago Homes for Sale, Chicago Mortgages
