A Home Inspector’s Weblog by Frank Schulte-Ladbeck

exploring homes and the lives in them around Houston

The Mortgage Industry and Home Buying

On the news this morning, there was an announcement of another mortgage firm having a sudden collapse. For the past couple of weeks, the stock market has been a roller coaster. Foreclosures are going up, and many people are dipping into their home’s equity to meet bill payments. What does this mean for someone who is looking to buy a home? Actually, a recent report by an economist at Rice University pointed out that the market is good for home buyers with good credit. He sees a turn around happening in six months to a year.

If you are looking for a home, you will probably find that a newly built home may not be your best option at this time. New home starts for low and middle price range homes are down in Houston, so you might want to look at pre-existing homes. I have recently inspected quite a few foreclosures, which can offer a good value (maybe, look into possible repair costs). Your first step should be to look at your finances. Obtain a copy of your credit report (a credit score will cost you, but a credit report without the score is free) from a credit agency to check for any problems. There is a link to obtain this report through the usa.gov site. This site also has a great deal of consumer information that you should use. Then go to your bank to see what they might offer on a loan. Your bank might have advantages for you to get the mortgage from them, but at least you will see if you pre-qualify. After this, you might want to look at what your monthly costs would be, and if you are comfortable with them. You might just find that you can buy the home you want at a good price.

Remember, the consumer credit industry will be more leary of giving out loans, but if you qualify, they would be happy to give you one. Why? Well, they stand to make money from your mortgage, and once you are in the home, you just might be spending more on goods like appliances, services, and other home goods, which you more than likely will be using credit to purchase. More money for their profit margins, so home purchases are good for the economy. When looking for a lender, search for established firms who you feel comfortable with, and you should find that you will have a good deal.

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