As real estate markets across the country recover, buyers, sellers, and agents must all come to terms with the new face of American real estate.By Tom Davidson
Mortgages are not as easy to qualify for as they once were. Lenders are stricter than ever regarding their guidelines for mortgage approval. Down payments will be in the 20 % range for those homebuyers who want to qualify for the best available interest rates through traditional mortgage lenders. The credit scores needed to qualify for these loans will be higher as well. Just a few years ago a FICO score of 650 was enough to qualify for a loan. Since the mortgage crisis, you will need a 730 or better to qualify. Traditional lenders are much more cautious since the housing market collapse, so it will be a bit harder to get a loan. The good news on the stricter lending practices is if you do qualify, you will have a solid mortgage at a great interest rate with no PMI and 20% equity in your new home.
There are alternatives if the traditional lending guidelines out of your reach. The Federal Housing Authority (FHA) is available to assist you in getting a loan. They have loan programs that are a little easier to qualify for than the mortgages found at traditional banks or mortgage lenders. A qualifying credit score can be a little lower than with a conventional loan and the down payments needed can be as low at 3 ½ percent.
Although economic recovery is fantastic, it is also likely to increase interest rates and home prices in the future. If you have the credit scores to take advantage of the best possible rates, there are great opportunities available for homebuyers and investors. In 2011 and beyond, there are going to be some tremendous opportunities in real estate, and not only for the buyers.
As real estate markets across the country recover, buyers, sellers, and agents must all come to terms with the new face of American real estate.By Tom Davidson
Mortgages are not as easy to qualify for as they once were. Lenders are stricter than ever regarding their guidelines for mortgage approval. Down payments will be in the 20 % range for those homebuyers who want to qualify for the best available interest rates through traditional mortgage lenders. The credit scores needed to qualify for these loans will be higher as well. Just a few years ago a FICO score of 650 was enough to qualify for a loan. Since the mortgage crisis, you will need a 730 or better to qualify. Traditional lenders are much more cautious since the housing market collapse, so it will be a bit harder to get a loan. The good news on the stricter lending practices is if you do qualify, you will have a solid mortgage at a great interest rate with no PMI and 20% equity in your new home.
There are alternatives if the traditional lending guidelines out of your reach. The Federal Housing Authority (FHA) is available to assist you in getting a loan. They have loan programs that are a little easier to qualify for than the mortgages found at traditional banks or mortgage lenders. A qualifying credit score can be a little lower than with a conventional loan and the down payments needed can be as low at 3 ½ percent.
Although economic recovery is fantastic, it is also likely to increase interest rates and home prices in the future. If you have the credit scores to take advantage of the best possible rates, there are great opportunities available for homebuyers and investors. In 2011 and beyond, there are going to be some tremendous opportunities in real estate, and not only for the buyers.