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Can I Get a Home Mortgage Loan?

By Nick Kent

Republish: EasyPublish™
Published: 29Oct2008
Word count: 577
Viewed: 211 time(s)

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The most recent Gallup Polls involving consumer confidence aren't good. Only an approximate 5% of consumers believe our economy is in good order. And additionally, only about 12% believe that things will get better in the near future. Who can blame them? Housing prices have nose-dived, foreclosure rates have been soaring, and a fair number of major lenders have recently found themselves on the verge of ruin. The economy is essentially the only issue people seem to care about these days.

In addition, tossing around phrases such as "credit freeze" certainly doesn't help things, especially when very little clarification of their meaning is given. What it actually does is lead consumers to believe that it isn't possible to get a loan on a new home or car, which is simply not true. Multiple steps have been taken by the U.S. Federal Government in order to insulate consumers from the current economic crisis and encourage continued activity in the consumer lending sector. And despite lending criteria being tightened, many potential borrowers are still able to receive financing for new homes.

Now may in fact be the best time to buy a home. According to the National Association of Realtors, the average sale price of existing homes has declined roughly 9.5%, which is the largest fall since they began recording in 1999. The S&P/Case-Shiller 10-city housing price index also saw the steepest drop in its history, plunging about 17.5%. What this means for those considering the purchase of a new home is that they can potentially do quite well, as housing prices haven't been this low in a long time.

Additionally, new FHA lending regulations recently put in place also favor consumers. The limits on FHA-insured loans have been increased from $362,790 to as high as $729,750, depending on the area. FHA loans are now running very reasonable rates and only require a 3.5% down payment, and are even allowing down payment assistance from family members.

One interesting thing to note for first-time home buyers is that if you make less than $75,000 a year, you will receive a tax credit for 10% of the sale price of the new house, capped at $7,500. This credit is available to buyers through July 1, 2009. Now, while it is being called a credit, actually it's technically a loan. But it isn't often that you can find a 0% loan that's payable over 15 years, so it's a good thing as far as I'm concerned.

As I mentioned earlier, lending criteria has tightened a bit, and though minimum credit scores were in the low 500's until recently, they now usually range between the upper 500's to the low 600's. Also, 100% financing has become a rarity given the current economic crisis, so it's not unreasonable to expect that you will have to put some money down. More is required in the way of documentation and proof of income these days as well.

It's hard to say who will or who won't be approved for a home loan, so you'll probably be best served by meeting with a Certified Mortgage Planner. They will be able not only to help you figure out which lenders will finance you, but also to assist you in deciding which offer best suits your individual situation.

Rate1st is the United States' largest online lending network, and is proud to provide a easy, efficient and safe way to shop for an FHA loan during trying economic times. To contact a Certified Mortgage Planner about information on FHA loans, please visit http://www.Rate1st.com.

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