by Kari J. Roehl of The Right Address
The mainstream news media have painted such a bleak picture for mortgage availability, that I wanted to clear thing up a little. Bad news sells papers, and gets the headlines. The fact is, there is ample money available for purchasing a new home. True, there are situations where the risks of lending are higher, and for those types of deals money is tighter, those transactions are, generally, new construction condominiums, and condominiums that have a high concentration of rental units in the development, and multi family properties. Why, condominiums? Nationally, the foreclosure ratio has been higher than on single family properties, generally competition is tougher in a controlled development of similar properties, and more so if there are distressed sales that are identical you the one you want to sell.
For single family properties, the money is available, generally with at least "good" credit, (no need for great or perfect credit) there are 3% to 5% down payment loan programs, all at reasonable rates, currently in the very low 6's. True, you will need to verify that your income is sufficient to qualify for the loan terms, and that the property is in reasonable condition and that the appraiser can support the sale price with recent like properties. But those are reasonable requests when you are asking for hundreds of thousands of dollars, If you have no money for a down payment or have poor credit or can not verify your income stream, your options are now slimmer, but that is fair too, history has shown those loan to have higher risks, and thus a higher potential for default, so we now need to compensate for those risks by asking for a larger down payment or higher rate or both.
The best way to find out what you can afford and qualify for is to talk to mortgage professional. Ask that loan officer if they are full time, is the office in the metro area, do they fund their own loans, How long has the loan officer and the company been in business? these questions will help you find the right person to help with the mortgage, and of course,KARI, can help with the Real-estate part!.
Update... the state bond program WHEDA is suspending funding until the capital markets are stable and the state can secure mortgage revenue bonds at reasonable rates again, stay tuned for current information!
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