For information on “soft market” policies, please read It’s here…now…what does it mean?
Tybee Island is now under the “soft market” policy. This means that the maximum loan to value will be decreased by 5% in this area. If you were looking to buy in the Tybee Island area and were pre approved for a 95% loan to value mortgage, you will now be required to put down an extra 5%. So your 95% mortgage loan to value is now 90%.
The term “soft market” applies to a declining market area. Usually, there are many homes for sale in the area and the homes have a longer stay on the market. Basically, you lose buying power and your down payment goes up.
Also, the downtown area is beginning to be considered a “soft market”. Homes that have been on the market for over 6 months are being seen as such.
Of course, this isn’t good news for home buyers or sellers. Sellers will now have to make sure their home is priced accordingly. No one wants to put an offer in, start the due diligence period, and then find out it didn’t appraise. Buyers now have to have more money down and can borrow less. But the positive side is that homes will be affordable and only truly qualified buyers will be looking!