Weekly Special | May 20, 2019

Buyers Favor Conventional Loans In Tallahassee

The majority of homebuyers who use a mortgage loan when buying a home in Tallahassee use a conventional loan product. In 2018, three out of every four borrowers used a conventional loan.

The graph above shows that nearly one in four homebuyers paid cash while 77% used a loan. Here is how the loan share breaks out:

• Conventional: 75% • FHA: 13% • VA: 9% • USDA/RD: 1% • Other: 1% So why does this matter?

There are a couple of reasons. First, buyers should know that there are numerous loan products to choose from, so working with a lender that they and their real estate agent trust will ensure that they are exposed to all opportunities out there.

Second, is that these loan programs undergo change on a regular basis. As a buyer, you might get pre-qualified under one program only to find out that recent changes to it or another program present other opportunities or problems.

As a case in point, the FHA has decided that is must tighten up its lending requirements this year. It is attacking a problem that it sees from making too many loans last year to people with high debt-to-income ratios who also had little cash reserves and poor credit. These new changes could very-well create a decline in demand, or even push the “Other” loan group to step in with programs for displaced borrowers (think 2005 “Again”). We are keeping watch.

This issue went with a longer report on our blog: read the full blog post. The original one-page Weekly Special PDF is still available.