Financing in Today’s Market

As the mortgage markets continue to struggle, many buyers are finding it more difficult to navigate the confusion of financing.  Even as a Real Estate professional I am learning new things every day.  Here are a few important general tips to remember:

Always get pre-approved!  In writing!  You want to be sure that our lender verifies your credit and income- that constitutes a pre-approval.  Anything less, such as taking your info over the phone and nothing else, will at best, get you a pre-qualification letter.  That kind of letter is pretty useless in this market- you want a stronger letter to give sellers when you a make an offer.

Keep your pre-approval updated.  With the ways loan programs are changing you should check in with you lender after 30 days if you haven’t found your house yet.  Just make sure the plan he had for you is still around and that you still fit into this program.

Start saving money- now.  Currently down payment assistance programs are scheduled to be shut down after Sept 30th and 100% financing is basically a thing of the past.  So you’ll need some money for down payment (at least 3% of the purchase price) plus a reserve in the bank of two more months of payments.  And you might also want to be able to pay your closing costs (another 1-3% of purchase price), you can ask the seller to pay these costs but it can’t hurt to have them in your bank account.

Those are some quick suggestions for navigating this confusing market.  Hope this helps make things a little clearer.  I’ll keep you up to date as I find out more in this ever changing world or finance!

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