Don’t’ Give Up on the American Dream of Owning a Home
By Michael Haltman
For a weekend change of pace, we will move away from looking at the credit, stock and commercial mortgage markets , and examine about a topic that is probably much more on the minds of the majority of people around the country today.
Can I Afford To Buy A Home?
A better question, given the steep drop in housing prices and the fact that we are in one of the best buyers markets seen in a long, long time, is can you afford not to buy a home if you have been considering it. How we got here!
You don’t have to be a real estate broker to know what you see driving down the streets in your town and every other town. A large amount of For Sale signs lining the streets. More than has been seen in a long time. What does this mean to me or you? Simple supply and demand and a great opportunity for people in the market to buy a home, assuming that they do not have to sell one 1st.
Everybody that you talk to is more than just a little aware of the turmoil in the credit markets, stock markets, mortgage markets and housing markets. It has been well documented that for anyone other than the most pristine borrowers (i.e. credit scores above 700) with 20% or more to put down on their homes, the ability to qualify for a home mortgage is an uphill walk to the summit of Mt. Everest.
I Reached Out To A Residential Mortgage Broker Friend Of Mine
In my day to day business of the commercial mortgage market, I know first hand how the banks unwillingness to lend has made the process of getting loans underwritten extremely difficult.
I asked the question of what it is that people do if they can not go to their local S&L and apply for a mortgage due to any number of issues that they may have either with credit, income or down payment (or maybe all three).
This Is What He Told Me
Many of you probably have heard of the FHA or Federal Housing Administration and FHA loans. Many of you may be aware of how they work and who can qualify. I know that I have heard about the program, but I was not really aware of the details and what it is really there for, which is to make home ownership possible to people who might otherwise not qualify through conventional means. It was created during the Great Depression, and definitely has some relevance today.
Summary Of The Program
Just to summarize some of what he told me, these are a few of the basics. With some of the changes in the size of the loans that FHA will allow, more and more homes and buyers will be able to qualify.
-To make FHA a realistic option in higher priced areas, loan limits have been raised (differs by state and county).
-Credit scores below 600 can qualify.
-Down payment requirements are much lower than the typical 20% level.
-Low to moderate income earners qualify and other than earned income streams can be considered.
What Information Will The Lender Need To Make An Initial Decision To Move Forward?
The information that you would have to provide a lender so that they can make an initial determination of the viability of your loan request is pretty basic. Moving forward, you would of course have to provide more documentation.
-What state is the property in?
-Property type?
-Loan term desired?
-Purchase price or estimated property value for a refinance?
-Credit score?
-Purchase or refinance?
-Any previous mortgage lates, bankruptcies, foreclosures, payment lates on other credit?
-Monthly housing expenses, monthly non-housing expenses and monthly combined income
Because these loans are insured by the federal government, the lenders are ready, willing and able.
Michael Haltman, President
Exeter Commercial LLC
Jericho, New York
The Political and Financial Markets Commentator http://politicsandfinance.blogspot.com
Other websites include: http://www.thecommercialcapitalmortgageseminar.com
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Tags: american dream, Banks, borrowers, can i afford to buy a home, commercial mortgage broker, commercial mortgage market, credit markets, credit score, credit scores, federal housing administration, fha loans, Government, home mortgage, mortgage markets, Mortgages, real estate broker, residential mortgage broker
