It’s in the news daily…banks closing their mortgage divisions, lenders writing off billions of dollars in subprime mortgage debt, the Federal Reserve holding auctions to inject more money into the financial system. With all the doom and gloom, you might think that the prospect of buying a new home and finding a lender that will give you a decent rate on a home mortgage is nearly an impossible feat. But it’s not.
There are a lot of mortgage companies out there that did little to no business in the non-conforming loan category, still loaning money to home buyers, just as they did before the subprime mortgage debacle. Many other lenders that felt the sting of exposure from bad mortgage debt did not pull up posts and exit the market. In fact, they’re even writing quite a few jumbo mortgages (loans for more than $417,000) these days. After all, banks are in the business to make money. To make money, banks still need to write loans. Sure, they’re more cautious, but if they used better business practices all along, would we be talking about a credit crunch and subprime mortgage crisis? Would you loan someone money who couldn’t prove he had the means or the method to pay you back? I sure wouldn’t.
So, what do you have to do to qualify for good mortgage rates these days? Lenders want to see:
Generally, if you have paid your bills on-time, and you can prove that you make the money to buy the house, you won’t have a problem qualifying for a loan. (Seems like the same criteria the banks required when I bought my home back in the early 90’s, only interest rates were at about 10% then!).
What if you are self-employed, or can’t document your income? That’s okay too. Buyers can still purchase new homes with a “stated” or undocumented income; you’ll just need to have a larger down-payment as equity and/or several months worth of mortgage reserves to get the best interest rates.
If you’ve been preparing to buy a new home, don’t let the bad news scare you away. With the current inventory of both new homes and existing homes, there are some great deals out there. Interest rates are lower than they’ve been for years, and lenders are looking for qualified borrowers. Talk with a home loan specialist about prequalifying for a home mortgage. You may be pleasantly surprised at what they they can for you!
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The Author: Sandra Tuell Website: http://www.newhomes.com About: As weblog author for Homes Advisory, the blog for New Homes Realty, Inc., Sandra Tuell covers topics that run the real estate gamut, written expressly for the home buyer. On the blog, home buyers will find practical information and advice on preparing their existing homes for sale, enlisting the services of a buyer’s agent, searching for new homes, making an offer and closing the transaction. Sandra regularly presents real estate news from the perspective of how events will impact home buyers and the real estate industry in general. Trained as a journalist, Sandra stepped into the real estate industry as an accredited home staging specialist, interior arranger and color expert. Since March 2007, Sandra has researched, commented on and explored happenings in the real estate industry, including home building, home mortgages and financing, real estate investing, and the economy. With a passion for all that is pertinent to the design, comfort, livability and marketability of the home, Sandra also provides tips and insights for homeowners who wish to maximize the potential of their personal spaces and turn their new houses into homes. For the past four years, Sandra has operated her own interior arrangement and home staging company, Roomscapes, servicing clients in Pinellas County, Florida. Previously, Sandra worked in the corporate world as a marketing professional, applying her creative energy in a variety of roles including advertising, promotions, special events planning and web content creation. Her current position as a writer for New Homes Realty allows her to bring together her love of design and her educational training as a journalist. "It's really the best of both worlds," says Sandra.
This entry was posted by Sandra Tuell, on Monday, January 14th, 2008 at 3:16 pm and is filed under Mortgage/Home Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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