Best Loans for Home Buyers

The burst of the housing bubble has lead to some unique circumstances for today’s home buyers. Banks have become extremely stringent in their lending criteria. Gone are the days when almost anyone could obtain financing with no down payment and even a no doc home loan was easy to obtain. Additionally a growing percentage of the housing inventory is a distressed sale such as a foreclosure or short sale. Buyers should evaluate these conditions and take advantage of niche programs designed specifically to address the current conditions.

If you are a buyer interested in a foreclosure listing, often times there are loan programs specific to purchase that particular property offered by the seller. Even if you are already pre-approved by a lender, check into loan programs the bank that owns the property is offering. Ask your realtor to speak to the listing agent regarding any seller financing offered. Foreclosure listing agents usually carry a large volume and sometimes forget to input this information in the agent remarks of the MLS listing. It’s always best to ask.

For example Fannie Mae offers attractive financing on some of their properties. These properties are referred to as Homepath properties. Homepath properties may offer regular purchase financing. They also may offer a renovation mortgage. A renovation mortgage covers the cost of light renovation. Some properties are eligible for both the Homepath financing and the Homepath renovation mortgage. Advantages of Homepath financing include no appraisal fees, no mortgage insurance and down payment as low as 3%. Best of all this financing is available to both owner occupants and investors. You can get more information at homepath.com. There you also find a list of lenders in your state that offer this financing.

Regions Bank is another example of a seller that also offers financing specific to their foreclosures. This is financing you will not find at your local branch. Usually with a little over 10% down payment and a full documentation loan with good credit they will finance their REOs or real estate owned properties. This is a great options if your conventional mortgage lender denies you financing due to property condition on a Regions Bank foreclosed home.

Always remember that the home purchasing process can be lengthy. While you are doing your home search be sure not make any sudden moves that could affect your credit score. Buying a new car, making a large purchase such as for furniture on a credit card, missing a payment on a bill all can have a negative affects on your credit score. Sometime you may no longer qualify for a loan product you were already pre-approved for. Another point to remember is to not make sudden changes in your employment. Bonus income, overtime income and self employment income is classified differently than salaried income. Dramatic changes in the last few months prior to a home purchase can have a damaging impact. To obtain the best loans, be sure to avoid such actions.

While the home buying environment has changed dramatically, there are still opportunities for home buyers. Interest rates are historically low and good financing is possible. However in order to get the best deal for you remember to do your research, ask questions about the property your are interested in and keep on top of your own finances during the process. The best loans are possible by keeping these points in mind.