I just got off the phone with a client who I was working with who bought a house and was trying to do everything he could to get the bank to finance.  Because it was a large ticket item the bank would not give him favorable terms to finance it.  They kept telling him that he was going to have to put more down.

In today’s market, we are seeing that availability of financing is really holding the market back.  In 2004 and 2005, 100% financing was available to anyone who wanted it.  Now the banks have overreacted and have swung so far back to the other side that availability of financing is becoming harder and harder and you do not want to get in a situation where the only buyers you have are cash buyers or buyers willing to put 50% down.

For years, the industry standard was 80%.  Most people understand that putting 20% down is the way it should be.  On larger ticket items, banks are requiring as much as 40%-50% down and most people are not willing to release that much cash – especially when they have sufficient income and are very comfortable with the monthly payments. 

When will this turn around?  It has been my experience that once the Federal Government gets more involved it seems to take longer. 

I hope it turns around soon and banks will adjust their thinking to be more in line with what is reasonable in financing.