| HeraldNet - Snohomish County's online news source |
 THURSDAY, SEPTEMBER 2, 2010 2:09 pm |
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You can still get a home loan Conditions are favorable for buyers with the right credit and income, area lenders say. Despite what's happening in the international credit market, Vern Holden wants potential buyers to know banks are still lending money to local home buyers.The Mill Creek Windermere broker adds this caveat: Unlike a few years ago, buyers need a decent credit score and an employment history. "There is financing out there, but don't expect to buy a house if you're making $8.50 an hour and you've only been working 30 days," Holden said. "Those days are gone." There's a "huge disparity" between national news and the availability of credit for local home buyers, said James Wirth, a loan originator with Landover Mortgage, which has offices in Snohomish County. "The mortgage market is unaffected by recent economic changes," he said. "We really are not seeing the fallout on the mortgage side. Lenders are still lending." Wirth said media reports have focused on the number of lenders folding rather than what remains. Lenders are still lending and mortgages are still out there, he said. Buyers can even find loans with zero down payments. A U.S. Department of Agriculture loan aimed at homes in rural areas requires no down payment. Buyers with credit scores as low as 580 can still qualify for FHA loans with a 3 percent down payment. FHA loans are government mortgages insured by the Federal Housing Administration. Many of the people who took subprime loans could have qualified for FHA loans, but didn't because subprime loans required less paperwork and a higher debt-to-income ratio, which allowed borrowers to buy more house, Wirth said. A surge of buyers have taken advantage of FHA loans recently, he said, and some buyers may qualify for down payment assistance from the Washington State Housing Finance Commission (www.wshfc.org). Borrowers interested in adding a second mortgage on their home or purchasing an investment property will find less favorable terms and tighter restrictions, Wirth said. Those interested in buying a condominium may also find tighter restrictions, since there's an assumption condo values are more likely to fall quickly. Most lenders will expect at least a 5 percent or 10 percent down payment on loans for condos, he said. It's important for buyers to be approved for a loan prior to falling in love with their dream house, he said. More lookers are turning into buyers, and real estate agents are fielding more questions from buyers about financing, said Diedre Haines, Coldwell Banker Bain's regional managing broker for the county. She said loans seemed to more difficult to get earlier in the year, a time when rapid market changes made loan programs disappeared fast. Now, she said, that doesn't seem to be an issue. Interest rates remain favorable and there are good loan programs available, she said. More than two-thirds of the buyers her agents work with are using FHA or Veteran Administration loans. "FHA has become the new magic word and more people are turning to it," she said. Reporter Debra Smith: 425-339-3197 or dsmith@heraldnet.com. |
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