Why You Shouldn't Give Up on Buying a Home
NEW YORK (TheStreet) -- Hey, don't give up so easy!
In a nutshell, the mortgage industry wants potential homebuyers to know that getting a loan isn't as difficult as many people think. Yes, federal regulations are tougher than they used to be, and lenders are more cautious. But lenders don't make money if they don't approve loans.
Because higher interest rates have undermined demand for refinancing existing mortgages, lenders need to boost loans to homebuyers. But a survey shows that many potential borrowers are so discouraged by tales of tight lending standards that they give up before they've started.
The survey by loanDepot, an online mortgage lender, found that 46% of potential homebuyers did not bother to investigate the possibility of getting a loan. At the same time, it found that high demand for homes, with 29% of Americans saying they'd like to buy within the next two years.Mortgage Qualifier Calculator, which will provide a good sense of your chances. Then, because each lender's rules are a bit different, look for a good deal with the search tool. After you find a few appealing loans, go to the lenders' websites and look for a free tool for pre-qualifying. That will show whether you generally fit the lender's requirements, assuming you provide accurate information on your credit score, debts and income. If the results look promising, take the next step by applying for a pre-approval. There will be a nominal cost, perhaps $30 or less, because the lender will actually check your credit report. A pre-approval is not a promise to give you a mortgage, because that decision will depend on information that's not yet available, including the appraisal of the home you choose, but it is a strong indication of your ability to borrow up to a given limit. If you want to buy a home, now's a good time. Prices are still well below their peaks of a few years ago, and loan rates are still quite reasonable. Investigating the mortgage market is worth some trouble and expense, because if mortgage rates and home prices rise, qualifying for a loan could become even harder in a year or two.
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