Explosive Opportunities

By now, most of you realize that home values are falling at an alarming rate because of the Mortgage Crisis. But with any crisis, there are always opportunities. Some of you will have the opportunity to buy a home which you wouldn't have otherwise been able to afford. Perhaps your dream home...

If you have no interest in buying a home; or you own an affordable home, and you're happy where you are, then don't overly concern yourself with the housing market. The housing market is cyclical, and although this time around it has been compounded by other factors, it will bounce back. Please feel free to continue reading, but this article was not written with you in mind.

If you have cash, and are leasing an apartment or a home while waiting for the market to stabilize (or bottom) before you buy, then I believe you're well on your way to making your dream home a reality. Please continue reading, as many of the points below relate to you.

If you own a home, but have decided you want to take advantage of the declining market to buy your dream home, then please continue reading, this article was written with you in mind.

Lenders have drastically changed their lending standards, so be aware of the following:

• You may no longer qualify for as much money as you thought. You should approach a lender, and get pre-approved for a mortgage, so that you're ready to buy when the time is right.


• If you have filed for bankruptcy in the last five years, then you are not eligible for a traditional mortgage. Fanny Mae just increased this limit from four to five years as a direct result of the Mortgage Crisis.


• The minimum FICO score to buy a home is now 580. If your FICO score is currently lower than this, then you are not eligible for a traditional mortgage.


• For a conventional mortgage, you'll need enough cash to either put 10% (of the purchase price) down (with a 720 FICO score) or 20% down (with a 660 FICO score). The days of zero down financing and/or using home equity (or second mortgage) to supplement the cash you don't have are over.


• If you're planning to lease your current home and buy a new home, your income should be high enough to pay the mortgage on both homes should you have difficulty keeping it rented. There's no point in stretching yourself to buy your dream home, and ruining your credit in the process.


• The conforming loan limits have been increased for many metropolitan areas; however, be advised that you will pay a significantly higher interest rate for these new jumbo loans.


• Pay off that pesky credit card debt now, while you're waiting for the market to bottom. Many lenders have made adjustments to their loan programs that may render you ineligible, if your debt service ratio is too high.


• Finally, don't be anxious!!! It's better to allow the market to bottom, and buy on the way up, then to buy as prices are still falling.

Conclusion

If you're fortunate enough to be in a position to buy right now, then you're definitely in the driver's seat as property values are set to continue to plummet.   If you happen to live in California, Florida, Georgia, Michigan, or Nevada, then you're doubly fortunate as these states were hit hardest by foreclosures.  California and Florida combined currently represent 50% of all foreclosures in the country!  The opportunity to purchase your dream home is nearing fruition.

However, If you are ineligible for a traditional mortgage for any reason, take heart. As I said before, the housing market is cyclical. It's all happened before, and it will happen again.