Real Estate 101: What New Home Buyers Need To Know

So you've decided to buy a house, but you're not sure if your finances are quite up to speed. Even if you hope to buy six months from now, there are numerous improvements and adjustments to be made in the interim, prior to taking on a mortgage.

First-time home buying is well documented as an arduous process, and much of that can be attributed to the sheer number of new and unexpected issues. Therefore, the more you know, the better you're likely to fare. Here, briefly, are some aspects buyers should consider when shoring up finances to buy a house.

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There's Life After Bailing On A Mortgage

The typical questions about ethics and blame were not what three Huffington Post writers had in mind last year when they asked readers, "Are you considering walking away? Have you already walked away from an underwater mortgage?"

Nearly one in four American mortgages is worth more than the home it's tied to. That's about 10.8 million mortgages. Borrowers of 58 of those mortgages responded to the reporters. In the ensuing year, 10 homeowners lost touch with The Huffington Post but 48 stayed in contact and reported on their experiences. Today, just eight are still in their homes.

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Before Shopping For A Place, Check Financial Readiness

You might be ready to buy a home, but are you armed with the knowledge you need? Do you know about credit score requirements? Are you familiar with flexible standards on Federal Housing Administration loans?

Whether you are a first-time homebuyer or an experienced owner, buying a house requires a "preflight check," in the words of Barry Zigas, director of housing policy for the Consumer Federation of America. "It's a brave, new world with respect to credit requirements for mortgages," says John Ulzheimer, founder of 2StepCredit.com and formerly of FICO, which pioneered credit scoring.

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2011 FHA Home Loan Requirements for Borrowers

If you are a home buyer thinking of using an FHA loan to buy a home, you should be aware of certain changes to the FHA program. This page offers a summary of FHA home loan requirements for 2011.

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What is a Good Credit Score in 2011?

What is considered a good credit score these days? This is one of the most common questions we receive from our readers. And as we replace our 2010 calendars with new ones for 2011, this question will surely see a spike in frequency again.


So, in anticipation of all those emails, I thought I’d share my own definition of a good credit score in 2011:

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The Top 5 Barriers to Buying a Home

Buying a home is worlds away from just a few years ago. In 2000, approval rates were around 90 percent. Today, the home loan approval rating has fallen to a mere 30-40 percent. While decreased access to credit is a byproduct of the recession (largely caused by lax lending and the ensuing defaults) and the subsequent financial reform, it doesn’t change the fact that one of the following situations may prevent you from buying a home:

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Will Son Be Responsible For Girlfriend's Short Sale Debt If They Marry?

Q: My son just moved into a brand-new home. He has a girlfriend who lives with him, and she has a home of her own that is now involved in a short sale.  If they get married, will my son be responsible if the bank or bill collectors go after his wife to pay the remainder of her mortgage?

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After Foreclosure: The Consequences of Bad Credit

After foreclosure, you can expect your credit score to drop – by as much as 180 points. Even if your home is lost through short sale or deed in lieu of foreclosure, the result is the same – bad credit. Considering that you need a credit score of at least 580 to get a loan, a reasonable interest rate on a credit card, or even many apartments, the effect of foreclosure on your credit, and your life, is significant.

1. HOUSING: First, realize that after foreclosure, your housing situation is going to change. This may be somewhat obvious as you are losing your home, but consider the effect of foreclosure a bit deeper. You will not be able to purchase a home for at least seven years unless there were verifiable extenuating circumstances. Likewise, you may experience problems finding a new place to live as many landlords will not rent to people with bad credit (in many cases, property management agencies have strict guidelines prohibiting it). As such, it is in your best interest to apply for housing before filing for foreclosure (or at least spend time figuring out where you will live).


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One Third Of All Americans Unqualified For A Mortgage

According to research from Deutsche Bank, the number of Americans with credit scores below 600 has increased to 26% from only 15% prior to the start of the recession. Further examination of credit data reveals that 9% of all Americans have a credit score in the 600-649 range.

Based on current credit score requirements for a mortgage approval, any applicant with a score below 600 is almost certain to be turned down by a banking institution. Borrowers in the 600-649 range are also considered “weak” candidates with a high turn down rate, especially if the credit score is below 620.

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Home Prices Falling Despite Low Mortgage Rates

The fine bloggers over at Calculated Risk have a good article today about the future of housing prices. In essence the article asserts that there have been declines in home values in both May and June that have yet to fully show up in many measures of home prices.

This premise is based upon data from Campbell Surveys that shows prices for short sales fell 6.3%, move-in ready foreclosures fell 6.8 percent, and non-distressed properties dropped 4.6 percent.

The decline can likely be traced to several factors. First is the collapse in demand for homes following the expiration of the first time home buyer tax credit at the end of April (the overall weakness of the economy also plays a part in the lack of demand). The next factor is the massive overhang of houses on the market and in the hands of banks and lenders. Finally, the sheer volume of foreclosed and distressed homes negatively affects the price of homes.

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How Financial Reform Could Affect You

Once signed into law by President Barack Obama, how will the new financial reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act affect consumers?

One of the most prominent features of the bill is the creation of a Consumer Financial Protection Bureau within the Federal Reserve. Its mission will be to oversee consumer financial products offered by banks, mortgage companies, credit cards, debt-settlement firms, loan providers and payday lenders. It will have the authority to craft regulations, launch investigations and act on consumer complaints. The following is a sample of other ways the bill may—or may not—act on average Americans.

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Can I Get A Mortgage After A Short Sale?

My husband and I have been trying to get a loan modification for the past year and a half and have exhausted all of our resources just to stay out of foreclosure. At this time we feel our best option may be to short sale our home and move elsewhere. However, we cannot decide whether or not we want to rent or buy a new home right away after the sale occurs, or if we will even be allowed to do so.

Our question to you is, “Can we get a mortgage after a short sale?”

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How Your Credit Score Affects Getting a Mortgage

As the economy has steadily declined and jobs continue to be lost, more and more Americans find themselves in need of serious loan modification help. A large number of families are struggling to stay up-to-date on their mortgage payments, and as many as six million families are likely to face foreclosure in the next few years. Even the fortunate families who are able to shell out monthly payments on time have become victims of this economic crisis due to decreasing property values.

However, there are a number of options for homeowners who are struggling financially. The most common is employing the help of one of the highly successful loan modification companies who specialize in assisting homeowners in permanently changing the terms of their loan. This will result in lower monthly payments, reduced interest rates, and often a waiving of delinquent payments, making the mortgage more affordable for the payer. It is a highly recommended option that can often result in interest rates being unfathomably reduced and eventually caped.

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US Mortgage Rates Steady At Or Near Record Lows

U.S. mortgage rates stayed at or near record lows in the past week, with the 30-year fixed rate 1/2 percentage point lower than a year ago, home funding company Freddie Mac (FRE.N)(FRE.P) said on Thursday.

In the midst of volatile bond markets, home loan rates continued to keep affordability high.

Demand for loans to buy homes tumbled to 13-year lows in May after spiking in prior weeks, when buyers raced to sign contracts before a homebuyer tax credit expired on April 30. The buyer retreat is seen as temporary, with spring sales pulled into earlier months because of the credit.

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Translating Mortgages Into Monthly Payments

Q: If I buy a house in Maine for $320,000 with a 7% interest rate for 30 years, what will my monthly payment be? What about at 8% interest for 15 years?

A: To start with direct answers to your questions, a $320,000 mortgage at 7% over 30 years would yield a monthly payment of $2,128.97. A $320,000 mortgage at 8% over 15 years would yield a monthly payment of $3,058.09.

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Your Worst Credit Problems Are Not As Bad As You Think!

There's a cruel irony to navigating your finances amid the ongoing credit crunch.

On the one hand, maintaining a great credit rating is more important than ever – especially if you're looking for a job or need a loan of any kind. On the other hand, if you mess up royally in the credit department, rest assured that even the worst credit mistakes you can make probably aren't as bad as you fear.

Here's a look at a couple of the most severe credit catastrophes you can face – and why none of them is fatal to your financial life.

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How to Avoid Common Real Estate Mistakes

Spring is typically peak season for buying and selling homes. But many Americans jump into this major transaction without doing their homework, and that could cost them.

CBS News Business and Economic Correspondent Rebecca Jarvis said on "The Early Show" Thursday buyers and sellers can expect two big unknowns in the stabilizing market: What happens with the federal stimulus money expires after April 30? And with foreclosures increasing, how much could that weigh in on prices?

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Education Key When Considering Home Ownership

Buying a home is one of the biggest decisions and commitments one will ever make, yet many people are not nearly as familiar with the ins and outs of the mortgage process as they are with their favorite TV show or sports team. Taking time to become educated on the subject will go a long way in easing the stress of buying a home and preparing for the responsibilities of home ownership.

"Low rates, combined with stabilizing home prices, are creating buying opportunities for those who qualify," says Michael Copley, retail lending senior vice president of TD Bank. "But before you buy, do as much research as possible - research lenders, know the products and make sure you understand the costs associated with home ownership."

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Fannie: Buying Another Home Is Easier If You Don’t Walk Away

About a month ago, one of our readers emailed me and asked why the mortgage industry wasn’t making things easier for borrowers who didn’t walk away from their mortgages. Angry over the fact that borrowers were walking away from their responsibilities, furthering the problems that have contributed to the housing downturn — “Walking away only because you are underwater is only going to further the problem” — our reader suggested, “If we can arm the people that will continue to pay with some ammunition, maybe they can help.”

A recent announcement by Fannie Mae is step in that very direction. On applications submitted after July 1, 2010, borrowers who lost their homes via a short sale will only have to wait two years before they can apply for another Fannie-backed mortgage. Previously, borrowers had to wait at least four years.

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5 Tips for Saving for a Down Payment on a Home

The first financial challenge when you're thinking about buying a home is how to come up with the down payment.

Traditionally, homebuyers need a down payment between 10 percent and 20 percent of the purchase price. During the housing bubble that figure dropped sharply, even down to zero. But loans that didn't require a down payment are now seen as one of the culprits of the mortgage crisis, because they allowed people to buy homes they couldn't afford.

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