There are still a number of smart options available to most buyers out there –- including those who do not have perfect credit scores or enough saved to make a 20 percent down payment.
Calabasas, CA (Vocus) December 6, 2007
It’s not hard to have questions about today’s real estate market -– especially if you’re the one considering purchasing your first home or making a move. With all the recent news reports about mortgage lending options, refinancing and interest rates, there is plenty of information floating around. To help provide some clarity, Countrywide Home Loans offers some tips from its nearly 40 years of experience.
“Countrywide Home Loans has helped millions of homebuyers navigate the home financing process and identify the best options for them based on their individual qualifications and financial situation,” said Dan Hanson, managing director of Countrywide Home Loans. “There are still a number of smart options available to most buyers out there –- including those who do not have perfect credit scores or enough saved to make a 20 percent down payment.”
According to Hanson, rather than get caught up in assumptions and misguided reports, Countrywide encourages home buyers to know the facts before they make one of the largest investments of their lifetime. The following are a few things for potential home buyers to consider:
FACT: Now may be a great time to shop.
Most people buy a home when the time is right for them. And, now may be a great time to shop given the available home inventory and buyer bargaining power. Whether you’re looking for a newly built home or a re-sell – deals abound. Just as important as getting the best deal on your new home is choosing the right home financing solution to close the transaction. Recently, Countrywide launched its America’s Open House campaign to help ensure home seekers have access to information to make informed decisions. The campaign has been a resounding success with Countrywide representatives assisting home buyers at more than 25,000 open houses across the country.
FACT: Most buyers still have a number of mortgage options available to them.
While access to money for funding home loans has been reduced over the last few months, and some loan options have gone away, most home buyers are still able to qualify for a wide array of choices. Those buyers can leverage the current home buyer’s market to get a good deal and then choose a mortgage they can comfortably manage.
If you’re a first time buyer looking to move up into a larger home or even a buyer with a credit score that is not perfect, explore your options. The fact is there are still financing options available. For starters, jumbo loans (loans greater than $417,000) are still available. Additionally, low down payment options remain available, meaning buyers don’t necessarily need 20 percent down Those with credit scores that are not perfect may well find that FHA and VA loans can be good alternatives.
FACT: You can boost your bargaining power by employing time-tested tactics.
By taking a few simple steps up front, you can help boost your bargaining power and increase the odds that your home buying experience is positive and successful. Two top tactics are: understand your credit and seek pre-approval from a reputable lender. This will enable you to shop with confidence and provide you critical knowledge of your true buying power.
A solid credit history is important when it comes to securing a home loan. Manage your credit by paying down high interest credit card debt and making payments on time. Most reputable lenders prefer that long-term debt does not exceed 32 to 38 percent of a potential buyer’s monthly gross income. For the 12 months prior to applying for a loan, be sure that none of your bills are past due, and remember to check your credit report and clear up any errors that appear.
When you’re ready to move forward with purchasing a home, partner with an experienced and reputable mortgage professional to get pre-approved. A pre-approval is a preliminary commitment from a lender to loan a buyer a predetermined amount. Lenders base this pre-approval on things like how much debt buyers have relative to their income, credit history, savings, and down payment. Obtain a written pre-approval from a reputable mortgage lender before you start house hunting so you know in advance how much home you can afford and can gain clout for negotiating a sale price. Pre-approvals also can speed up the loan process after a purchase contract is signed and help avoid any last-minute deal breakers.
FACT: Owning a home offers advantages v. renting.
Aside from pride of homeownership, the fact is there are many financial advantages to owning a home over renting. Homeowners with fixed-rate loans have the same mortgage payment for the entire life of their loan and avoid the periodic rent increases experienced by many renters. Homeowners may also experience income tax advantages that are not available to renters. The interest paid on a mortgage can be up to 100 percent tax deductible. After assessing the impact of potential tax deductions, some people may find that homeownership is ultimately less expensive than renting. Prospective homeowners should consult with a tax specialist for more details.
Also unlike renting, which offers no return on the monthly outlay, mortgage payments for many types of home loans pay down a portion of the principal balance of the loan each month. In doing so, the homeowner can build equity in the home, which may eventually be borrowed against for other expenses like home improvements or college educations, if desired.
For additional information, a local Countrywide Home Loans office can be reached by calling 800-747-1871. Home financing experts are available to help answer questions about the home-buying process.
About Countrywide Home Loans, Inc.:
Countrywide Home Loans, Inc., a member of the Countrywide® family -- America's #1 home loan lender -– (as ranked for 2006 by Inside Mortgage Finance, Feb. 2, 2007, Copyright 2007), originates, purchases, securitizes, sells and services home loans and is the primary subsidiary of Countrywide Financial Corporation (NYSE: CFC). Countrywide Financial Corporation, through its subsidiaries, provides mortgage banking and diversified financial services in domestic and international markets. Founded in 1969 and a member of the S&P 500 and Fortune 500, Countrywide Financial Corporation is headquartered in Calabasas, California and its family of companies has a workforce of more than 50,000 in over 900 offices across the country.