August 15, 2008 - If you are in the market to buy a home, whether it's your first or your fifth, there are aspects of the current mortgage finance environment that are important to understand.  Since the first and second waves of the "mortgage meltdown", or real estate financing crisis, have unfolded beginning in 2006, the landscape for obtaining a home loan has changed dramatically.

Just 3 years ago, if you could fog a mirror and sign your name, mortgage financing was available to you.  That may be a bit of an overstatement, but not by much!  At this point in time, we all know someone who has been challenged in keeping up with payments on one of the "creative financing" products that were available then.  While the newly tightened standards for obtaining a residential mortgage have taken care of much of the potential for getting into trouble, it's still a good idea to have a "back to basics" approach in the current market.  Taking a sensible, thorough approach to getting approved for a mortgage will increase your chances of success and also decrease the chances of trouble down the road.

Probably the most important factor in setting yourself up for success is to work with a "local" mortgage professional.  By local, we mean someone who has an office in the market area where you will be purchasing your home.  This is important because the local pro will have a deep understanding of the market and the avaiable properties, as well as the associated service providers required to complete a transaction, such as appraisal, title and escrow.

You will want to get pre-approved, rather than just pre-qualified for your loan in order to maximize your chances of actually getting funded and closing your escrow.  You should expect to have the funds available for a substantial down payment or 5-10% or more, although there are some programs available through FHA and VA that require smaller amounts.  If you have any credit issues, it's a good idea to get them resolved before beginning the loan application process.  A verifiable source of income is required for most loan programs available today.  If we attend to these details prior to applying for a loan and making an offer on a home, our chances of success increase dramatically.

Please feel free to contact me for a short list of seasoned local mortgage pros that I have worked with over the years and can recommend with confidence as capable of getting it done for you.