Wednesday, May 8, 2013

How Easy is it to Obtain Financing These Days?

Can potential homebuyers still obtain financing for a mortgage?

 

It seems that in today’s financial position if you’re behind on your mortgage, low income, and can’t make your payments their programs and plans to either let you stay in the home, short sale or for closing your home with cash provided to you at closing, or loan modification programs to get you in a better place. But what about all the rest of us that are not delinquent and have a moderate to upper middle income?

How difficult is it to obtain financing for home loan?

 

 The government and the banks are paying close attention to each other with what’s available and what’s allowed when it comes to financing mortgages. Banks don’t want to find themselves being
slapped on the hand by the government and the government doesn’t want have to bail anybody out anymore. So banks are either making it more difficult for the average Joe the pays his bills to get a home loan or giving money away for free and hanging on to real estate that otherwise would’ve put black marks on the banks books.


Even if you’re a moderate income earner coming up with a down payment can be difficult but not impossible. Banks still want to see that you’re responsible citizen making your payments on a regular basis but don’t ask for 100% financing. These 100% financing options are really put in place for those that can afford the down payment and need that extra help. But what about all the rest of us that might need a cool 10 grand to use of a down payment?

If you’re looking to buy a home, regardless of whether or not you have the full down payment or not, lenders want to see that you have some responsibility and saving money. This is not only good practice for obtaining a mortgage but good practice in homeownership overall. Lenders want to know that you’re responsible and can make your payments plus have a little cushion should you lose your job or have some situation happen that you no longer can gain income.

Saving even just for a few months can put in place anywhere from $1000-$10,000 depending on your income. That money makes a great down payment and since you’ve seen it build in your savings account it gives you more incentive to want to build that back up after you’ve depleted it for either the down payment or some other emergency.

I’m a big Dave Ramsey fan so if it’s not Dave Ramsey friendly I find it hard to go along with. While I agree everyone should have some playtime with play money I also believe that if you’re serious about buying something you will save the money to purchase it instead of putting in on a credit card or borrowing from friends or family.

Start with simply a few bucks each week or each month and then don’t touch it. Sell something, work a few more extra hours, cut back on eating out or lattes, and put that money into your emergency fund so that you have it for the down payment, for the closing costs or inspection fees, or simply to have an little extra cushion there when you need it. If you pull the money out simply put it back.

Buying a home and the reality of homeownership is an exciting adventure. Don’t let fear, or rejection from a mortgage lenders tear you down or make you think that you can never obtain a mortgage. It is very doable, you simply have to find the right lender and the right mortgage broker to find the right plan that meets your budget. Be wary of predatory lending and find a mortgage broker or officer that you trust. Tell them your needs and how much you want to spend on a home or how much you feel your budget can maintain and let them do the hard work for you.

2 comments:

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