Mortgages

Gone are the days when you just had to fog a mirror and the banks would beat down your door to give you a loan. However, it's still relatively easy to get a mortgage for anyone who should get a mortgage.

The banks have tightened their lending standards and are looking much harder at the borrowers credit-worthiness and also at the home for true market-value and the health of its marketplace.

Several things to consider when evaluating your chances of getting a mortgage

• Credit - banks are looking for borrowers who make their payments on time (rent, utilities, credit cards, ...). As long as you make your payments on time, your credit score should not be a problem.


• Downpayment - zero-down programs are getting harder to find. They still may be out there but realize the less you put down, the higher your interest rate will be. Many banks require 3% or more down for you to secure a good interest rate. 10% down for investment (non-owner-occupied) properties and 20% down to avoid paying Private Mortgage Insurance (note - PMI is currently tax-deductible for many borrowers and is temporary, often lasting five years or less)


• Type of Loan - FHA loans still allow 3% down which may even be a gift from a relative


• First Time Home-Buyer Programs - talk with your mortgage professional about programs local communities, state or federal government have available for first-time home-buyers


• Neighborhood - banks are asking their appraisers to look hard at the neighborhoods borrowers are purchasing in to ensure (a) there isn't a gross oversupply of homes and (b) the prices are relatively stable. If either of these items are not met, they will likely require a higher downpayment to lend $$ for that home.


• Time in Home - If you plan on being in a home for five years or less, think twice about purchasing. The recommended minimum is 7-10 years to ensure you can sell and at least break even. The crystal ball is quite cloudy for predicting how home values will perform in the next few years.

Finally, a couple parting thoughts... negotiate to get the best possible price on your home and remember, it's not a matter of timing the market, what's important is your time in the market.

Now go out and take advantage of those deals!