Mortgage is Not a Bad Word – Steps to Getting a Home Loan in the Credit Crunch

The bad news about the economy is inescapable these days. Consumer confidence is at an all time low and it’s easier to follow a tennis match than keep up with the daily rise and fall of the stock market. Even though everyone is carefully watching the bottom line, life does go on.

For those looking to buy a house, the current credit crisis can seem daunting. “Mortgage” seems to be the newest bad word. However, with some careful research and thoughtful consideration of long-term plans, it is possible to get a mortgage. Mortgage rates are historically low and housing prices are coming down, making it a good time to buy a home.

S Moe of LeaderOne Financial, a mortgage bank operating in the Austin real estate market, says, “For the credit worthy borrower there is lots of money to be lent.” He recommends the first step in this tougher economy is to be realistic about how much house to buy.

Mortgage calculators and other useful tools are easily found on the web at sites like and Taking the time to figure out a practical price range will save time and heartache when the actual house hunting begins.

A good place to start is to gather all financial records and look into credit scores. It is also important to determine in advance how much cash is available for a down payment. While the media may make it sound like it is impossible to qualify for a mortgage without 20{421b746ef4f4588dfd87c8acf16c9c4b10a4a0127eaff1927a04f4091b6d6d60} down, that is not actually the case. FHA loans can be done for as little as 3{421b746ef4f4588dfd87c8acf16c9c4b10a4a0127eaff1927a04f4091b6d6d60} down; nevertheless it is important to keep in mind how much the actual monthly mortgage payment will be.

Once credit worthiness and how much mortgage is truly affordable have been determined, it’s time to shop for a loan. This is can be the tricky part. While the days of easily qualifying for a jumbo loan are gone, it is still possible to get a bigger loan than you can afford. “Pre-approval is key,” says Mr. Moe.

Look into various lending sources such as banks and mortgage brokers. Websites like Lending Tree and E-Loan provide easy one-stop shopping, but it may be worth the effort to do some footwork. Keep in mind the loan costs, including the mortgage interest rates, broker fees, points (each point is one percent of the amount you borrow), application fees, credit report fee, and appraisals–just to name a few.

It is important to get more than one quote and be sure to read the fine print. It may take some time and effort on the part of the buyer, but the decision to purchase a house should not be made hastily. The economic news may seem bad, but the long-term investment in a family home is a sound one.

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