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Foreclosure Affects on Buyer Market

With several years experience in the mortgage industry helping hundreds of satisfied clients own the home of their dreams, it’s been hard for me to witness the number of great hardworking individuals and families who can no longer qualify for a home loan. Due to the explosion in home foreclosures over the past couple years many lending companies suffered drastic losses and several even went into bankruptcy as a result. The lending companies that have survived the foreclosure epidemic thus far have chosen not to accept such a risk in their available loan programs. Virtually the entire sub-prime lending market is now closed to potential buyers and homeowners seeking refinance. Additionally, foreclosure homes have flooded the market creating a drop in housing appraisals in many neighborhoods and communities.

So, technically we are in a buyers’ market but with less people qualifying for home loans many markets around the country are struggling. Self-employed and small business owners are perhaps the hardest hit in this market crisis. With stated income loan programs becoming increasingly tight or simply vanishing as lending products, many self-employed and small business owners must first diligently document their income over the past 3 years, have a good credit score, and cough up a huge down payment (5% to 10%) on their home purchase to qualify. Nevertheless, this dark storm in the mortgage industry does have a silver lining.

Many of the potentially harmful loan programs have gone away and many individuals and families that are financially unfit are turned away. Additionally, many fraudulent mortgage lenders have disappeared due to bankruptcy and legal action and higher ethical standards put in place have chased unscrupulous mortgage brokers out of the industry. These adjustments are ultimately in the best interests of the customer. Clients assume less risk overall by making a larger down payment. Also, by adhering to stricter debt to income ratios buyer’s walk into a home they can hold on to and truly live in with manageable payments. Today, potential buyers can greatly benefit from taking the time to educate themselves on the buying process at least three months before their desired home purchase date.

You should first contact a licensed real estate agent when preparing to buy a new home. The professional services of a real estate agent can help buyers locate their desired styles and types of homes as well as detail the average price range of homes in the buyers preferred areas.

Next you should contact a licensed mortgage consultant with experience lending in your area and state. Look for a licensed mortgage consultant who has several years experience in the lending industry and no past client foreclosures on their record. A great licensed mortgage consultant should be able to help you improve you credit and enable you to qualify for a manageable home loan within your budget taking your individual needs and family situation in mind.

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