Preconstruction Property Almost Ready To Close?

As if declining property values haven't been enough of a hit to anyone that purchasd a preconstruction property now they may have to worry about obtaining financing on it. A preconstruction property, for those of you that have been in a time capsule for the last 5 years, is a property that you purchase before it is constructed. You sign a contract to purchase it and then close on the property once construction is complete. When properties were appreciating at double digit speed a lot of people got into the preconstruction craze. Regular joes, and by that I mean people that had no experience in real estate investing, were purchasing properties and reselling them at unbelieveable profits. Most of the time they never even had to close on the property.

I purchased a preconstruction property myself but didn't close on it because the property never did get approval on their plans with the City of Miami so the project was never built. By this time real estate sales were slowing to a halt in South Florida so lucky for me I was able to get all of my deposit back. I was so happy the day I got the letter from the attorney stateing that I could get my money back now, if I so desired.

There are going to be many others that are not going to be lucky enough to get their deposits back if they don't close on the preconstruction property. With mortgage banks and lenders tightening up on their programs there are going to be alot of purchasers that cannot close on the loan. If they need a stated income/stated asset (SISA) mortgage for a wage earner (W-2'd employee) there is only one lender that will still do this type of mortgage and it's going to be at a high interest rate too. All lenders have also raised the limits on how low a credit score can be. Alot of people that purchased preconstruction properties bought them as investment properties which lenders are now not as quick to provide a mortgage on.

If this applies to you get busy calling a broker to see if you will still qualify to purchase the home. Do this right away, even if your home will not be ready for months because this will give you time to get your credit repaired if your credit score is not high enough to qualify with today's underwriting guidelines. Don't get stuck at the last minute.

Sandra Sheely is President of First Financial Mortgage, Inc. in Sunrise, FL. She has been in the Real Estate Industry for 12 years with experience in the mortgage industry and title industry. She has a couple of Mortgage websites. http://www.ffinancialmortgage.com and http://www.lowestraterefi.com She has a credit repair website at http://firstfinancial.fixcreditbiz.com/

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