Advice on Getting the Best Mortgage
The first five to six years of this decade represented a golden age for real estate. Money was cheap and easy to borrow. This, in turn, spurred massive borrowing and the real estate market as a whole. The action was hot, fast and heavy. Homes would be on the market for less than a week. Prices shot up as did the appreciated value of properties.
The break neck pace of the real estate market could not be sustained. As was predictable a few years back, we are now in a flat to depreciating real estate market depending upon the geographic area. One of the reasons for this is the backlash in the mortgage industry.
The mortgage market during the early part of this decade arguably got completely out of control. Some lenders were reputed to be lending money without even checking the bona fides of borrowers! Those days are over and the backlash from a large number of loan defaults is being felt by the borrowers of today.
If you are looking to purchase a home in the near future, you need to re-asses the current financing market for real estate. Lenders are pulling back on the reigns and stiffening their lending practices. Given this fact, you might have more difficulty acquiring financing than you originally imagined. There are ways to avoid problems, however.
You first step should be to order your credit report from the big three credit reporting agencies - Equifax, TransUnion and Experian. Review the reports for any negative marks and deal with them. Over fifty percent of people have erroneous negative marks on their credit reports. Make sure you do not or, if you do, deal with them.
The second step is to get pre-approved for your loan. Lenders are tightening up their borrowing requirements, but nobody is entirely sure what that actually means. To avoid a problem where you are in escrow and cannot get financing, you should get a lender commitment before even shopping for a home. Make sure to get it in writing and pay a few dollars to have it binding on the lender.
The real estate and finance markets have definitely cooled off. That does not mean, however, that the sky has fallen. You can get a loan, but be prudent in going through the process.
Related Tags: loan, mortgage, real estate, loans, home, house, borrow, lenders, subprime
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