How tough is it to buy a home in the current market?
Good question, prospective home buyer!
And the answer depends on so many things, but really focuses on:
Credit Scores, your "mid" score needs to be 620 or better. What is a "mid" score? Well there are three main Credit Information Repositories--Trans Union, Equifax, and Experian. So that means that 2 out of your 3 scored must be 620 or better. Make sense so far?
IF your scores are 620 or better than you may qualify for a mortgage with as little as 1% of your own money into the purchase, or possibly even 100% financing. However with the 100% programs the seller may be limited as to how much of your closing costs can be paid by them. It will vary fro, 3 to 6% of the loan amount.
OK, but John, my "mid" score is only 570, can I do anything? The answer is maybe. You may qualify for an FHA loan that is guaranteed by HUD and allows more lenient credit, HOWEVER you will need to have a minimum of 3% of your own money to put in the deal.
As your credit score falls, the amount of the down payment you will need rises. And so will things like Private Mortgage Insurance Rates, your Homeowners insurance rate, and the interest rate on the loan.
Veterans still have the option of using the VA Guaranteed Home Loan, where they in theory can get into a home with "no money". But that only happens IF the seller pays all their costs for them. Realistically, veterans will still need to have $1000 to $3000 in to most purchases at a minimum.
Everyones financing situation is different, and not all Lenders do all the types of loans. I strongly suggest that you sit down with an experienced Realtor so theu can reccomend several lenders that may be able to assist you.
And be prepeared to gather documents, and information for the Loan Officer. The quicker a Loan Officer gets accurate and complete information, the quicker they can get you a loan decision.
Right now, as a Buyer, you want to make your offer as strong as possible so you can negotiate a deal that works to get you in the home. Too many Buyers are thinking they can "beat the hell out of the seller", that too a point can be counter productive. Remember, at todays LOW rates that "extra" $500 you feel you need to beat the seller up over, is only going to "save" you ten cents a day.
My two cents worth is to be fair, you never know when you may need the old home owner to help you out donw the road with infromation on the house. And if you werre to tough to deal with when they sold you the home, they may not want to help you later.
If you are thinking about buying a home, business or commercial property, please call me.
John Ranville, Broker, Realtor, CSP, RECS, LTRS Certified
Personal Cell # 717-554-7430