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Real estate industry survey: Americans skeptical of fast housing recovery

[Dec 7, 2010.]


A recent real estate industry survey finds that approximately one-half of Americans believe that a housing recovery is at least two years away. Bloomberg reports that one-third of respondents indicated that they don't expect housing markets to improve until 2014. Although grim, this information suggests that those desiring and prepared to buy homes may continue to enjoy the combined benefits of low home prices and lower mortgage rates. The news is not great with mortgage rates as they are increasing. Waiting for better rates is probably not in your best interests if you're ready to shop for a mortgage loan and your new home right now.

Home shopping 101: Find your best mortgage deal first

Understanding how much you can realistically pay for a home becomes easier when you pre-qualify for a mortgage loan. Shop for your mortgage loan before looking at homes. Here are some tips for shopping mortgage loans and lenders:

  • Know your credit scores: Mortgage rates and lenders fees are generally based on your credit scores. The higher your FICO credit scores, the lower your mortgage rate and fees are likely to be.

  • Have cash on hand: You'll need to put 3.5 to 10 percent down for an FHA mortgage loan, and 10 to 20 percent down for conventional mortgage financing. Plan for an additional 3 to 5 percent of your home's purchase price for closing costs.

  • Shop mortgage quotes online: You can request multiple mortgage quotes from your home or office without the pressure of heavy duty sales tactics. Compare mortgage quotes line-by-line, and pay attention to the APR, or annual percentage rate, which provides total estimated costs associated with a mortgage loan as an annual percentage of the proposed mortgage amount.

  • Use mortgage calculators: Using free online mortgage calculators is helpful for comparing mortgage rates, closing costs, and mortgage loan features and repayment terms.

  • Do your homework: Work with a real estate professional to learn about home finance programs available to you. Real estate pros not only can direct you to mortgage companies, title companies and home inspection services. They're also knowledgeable about state and local housing finance programs and incentives that can help with buying a home.

  • Make notes and ask questions: Don't be shy about asking questions and negotiating with mortgage lenders. They want your business, and are willing to help you with finding a mortgage loan to match your needs.

Once you've gone through this process, you are in a better position to shop for your next home. Making an offer with the confidence of already being pre-approved sends a strong message to the seller that you are a serious contender, and one who can back up an offer with an approved mortgage loan.


About Author:

Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.

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