The Real Estate Market Stabilizes.. But Here are 10 Things You Need to Know if You’re House Hunting

- By Bossip Staff

Home sales have increased, inventory levels are down, and price declines have lessened a bit. More than three years into a painful housing crash, the real estate market has shown recent signs of change and stabilization. Meaning there are more hopeful home owners out there looking to buy homes. But before you do so, pop the top for some helpful tips to keep in mind.

1. Credit requirements for loans are still very tight. With unemployment rates still high, banks are tightening up on lending standards for all borrowers. Even those with great credit histories.

2. Expect for Down payments to be higher than normal. Loans backed by the Federal Housing Administration are at the low-end of the spectrum and come with minimum down payments of 3.5 percent. To get the best rate, you should have at least 20 percent for a down payment.

3. A Credit Score of 730 or higher. In order to get the best mortgage rate, a borrower should have a FICO score of at least 730. You should also be able to fully document your income and assets. To ensure that your credit score is as strong as possible, make sure to access your credit report in advance to see what you’re working with.

4. If you don’t meet good requirements to borrow  on the FHA. The FHA is a federal agency that insures mortgage loans against default. Standards for FHA loans are much lower than those for private lenders. The average credit score for FHA borrowers is about 690, and the minimum down payment is 3.5 percent.

5. With the recession as a factor, the FHA has increased. The FHA now guarantees nearly 3 of every 10 new home mortgages. This is a major increase opposed to 2006 when the agency only backed roughly 3 percent of new home loans.

6. Beware of Asset Purchase Program Changes. The Federal asset purchase program is scheduled to expire at the end of 2010, which could lead to higher rates. Keep in mind that the Fed has already extended this program once.

7. Stay Away from Jumbo Loans. Many borrowers won’t be able to obtain them. Most banks apply much stricter lending standards to them. Stay within your means.

8. Knowledge about Federal Fund Rates. While an increased federal funds rate could bring adjustable rate mortgages or higher home equity lines of credit, it has little direct influence on fixed mortgage rates.

9. Recovery in the Market could Equal Increased Mortgage Costs. Economic improvement could create more demand for credit, which will push rates higher. Economic improvement and other factors could raise rates on 30-year fixed mortgages as high as 5.75 percent as soon as summertime.

10. Fannie Mae and Freddie Mac Rebuilding is Crucial.The two mortgage finance giants buy home loans from banks and are a key source of liquidity for the market. Depending on how soon they rebuild, we could have some issues in the supply chains with mortgages.

Happy house hunting but take these tips into consideration before making such a major decision.

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Comments

  • The Official Mrs. Carter

    I need to buy a house for the $8000 tax credit…IRS is going to KILL me this tax season…yall pray for me. 🙂

  • KeepNit2Real

    I meant “scramble” heh heh

  • http://www.k.com noelle

    Oh, let me pass this along to my mom. She will be hunting for a nest on the Eastcoast vedy soon!!

  • Please

    Good thread but the Real Estate Market is far from being stable. There are waay to many banks still sitting on our taxpayer (bailout) dollars who wont loan money to the people who need it.

  • darealwifey

    Here are a few more tips:

    1. Stay away from adjustable rate mortgage’s (ARM’S). This is what got A LOT of homeowners into trouble to begin with. As interest rates rise (and they will), so does your mortgage payment. A one point interest rate jump could increase payments on a $100,000 mortgage by $66 per month. Remember, the U.S. interest rates have historically been MUCH higher than they are now.

    2. Pay off as much DEBT as you can BEFORE you apply for a mortgage. This does two things: increase your credit score AND increase the amount of house you will qualify to buy. The lower your debt-to-income ratio (DTI) the better.

    3. Be prepared to put AT LEAST 5-10% down. Unlike the article suggests, the NORMAL down payment has traditionally been 20% until President Bush took office, and made home ownership a priority of his administration (that’s how I was able to FINALLY buy a house). However, with the mortgage meltdown, the industry is moving BACK to the 20% down payment standard. If you can buy a house with less than 20% down, consider yourself very lucky by today’s standards.

  • KeepNit2Real

    lol@Pynk…yes it did do it for me. =P

    But I agree. The market NEEDS to stabilize, but don’t count on the news giving anyone an honest picture of how the housing market is fairing.

    I’m staying far, far away from a home for as long as I can. Only children will make me consideer that…and I don’t plan on any no time soon.

    By then, they’ll be making cyber cities with biodomes and I’ll be playing I-Robot like it’s an old classic…haha.

  • pynk♥{sugar}

    Btw, rich people are benefitting from this like you wouldn’t believe! (& I don’t blame them.) They’re playing monopoly when it comes to the r.e. market now. With all these homes going into foreclosure, & getting auctioned off at a fraction of the price, you better believe that they are buying these homes for a low price, and are renting them out or fixing them & re-selling them at a higher price. Doing that means (if you play it right) that these homes are practically paying for themselves. If you have money (& good credit of course), there is no better time to buy a home than now. As backwards as that sounds. lol

  • KeepNit2Real

    that’s true pynk. I found it extremely odd that at the same time America went into this huuuuuuuuge national debt that all others countries were doing the same…

    only to find out that the money families are getting off like fat cats! Their net worths have grown tremendously!

    This is exactly what you say it is…a game for them. It all starts with oil&gold. Period. the housing market is just a subsidy of a much larger financial racket.

  • pynk♥{sugar}

    KeepNit2Real
    12/9/09, 16:16:pm

    that’s true pynk. I found it extremely odd that at the same time America went into this huuuuuuuuge national debt that all others countries were doing the same…

    only to find out that the money families are getting off like fat cats! Their net worths have grown tremendously!

    This is exactly what you say it is…a game for them. It all starts with oil&gold. Period. the housing market is just a subsidy of a much larger financial racket.
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    I agree completely. See? I’m not as dumb as you probably thought. lol

  • KeepNit2Real

    lmao! I never thought that of you muh dear. *^_^* Behind a screen we can appear many ways…muahaha. =P

    But I read books that would scare the average “urbanite” simply because they don’t want to know about their future…blah, blah, blah…lol

    If you ever get a chance, pick up a book called A Century of War. Pretty good book if you like reading stuff like that.

  • pynk♥{sugar}

    KeepNit2Real
    12/9/09, 16:36:pm

    lmao! I never thought that of you muh dear. *^_^* Behind a screen we can appear many ways…muahaha. =P

    But I read books that would scare the average “urbanite” simply because they don’t want to know about their future…blah, blah, blah…lol

    If you ever get a chance, pick up a book called A Century of War. Pretty good book if you like reading stuff like that.
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    What’s it about? 🙂

  • money not 2 blow

    Before you purchase I home make sure you call this #800-337-0099

  • KeepNit2Real

    pynk♥{sugar}

    12/9/09, 16:53:pm

    What’s it about? 🙂

    _______________________

    It’s about how the Anglo-Saxon world power (Britain & America) have a chokehold on the world’s economy and have done it through war and resources.

    It explains everything from oil, politics to economy and how it affects the average citizen.

  • Illuminate Truth "The Strong Rule the Weak, and the Wise Rule the Strong."

    Latin translation for the word “mortgage”

    mort = death

    gage = pledge, oath, promise

    A mortgage is a death pledge. You’ll spend 20 -30 yrs paying back money that NEVER existed. A bank has to only have 30% of the available funds for a loan. Where does the other 70% come from? You…not including the compounded interest the bank charges on these phantom funds…that don’t exist..until you pay it.

    “Permit me to issue and control the money of the nation and I care not who makes its laws.”

    — Mayer Amsched Rothchild (co-founding family of the Federal Reserve Bank)

  • Shay

    I just closed on a home. I got a house 40% below the value. It’s a good time to buy but be smart about it. A few pieces of advice would be:

    1. Check your credit before applying. If your score is in the low 600 or less don’t even think about it. If it’s in the high 600s maybe but you may have higher rates.

    2. Apply for a mortgage before activly shopping for homes. It will let you know how much you can afford. A pre-approval will give you leverage when making offers. If your credit isn’t right you could lose money in a deal.

    3. Get an inspection. We found a couple major issues during mine. No matter how beautiful the house is even if it’s a newly built home. Inspections cost about $300 or more depending on the home. That $300 could save you thousands in the future.

    4. Start saving now and get a budget together. No matter how you borrow you’ll need something to bring to the table. You’ll also need money after the closing.

  • Jessica

    Is he still dating the girl on do ctor millio naire.c om? It seems a nice couple.

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  • Tamika

    Thank you for providing PRODUCTIVE infor for our community….these are the articles you guys need to send out more!!!!!

  • http://www.myloanapproval.org Mortgage broker

    Oh yeah and you get 8,000 back tax free for buying a home. That’s problaby more than some people have in their bank account now, think about it folks. You can an $80,000 home for less than you pay in rent and get $8,000 back to put up just in case.

    That’s enough money to pay your mortgage for an entire year. First year free… I bet that will make people open their eyes! : )

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