Economic Crisis: Are Mortgage Loans still available?
It's been all over the news for months. You hear words like mortgage meltdown, credit crunch, subprime implosion, banking crisis, and the big R(ecession). Foreclosures are up and banks are in trouble. Everyone is wondering if the Economic Stumulus Plan will fix these things or not.
So, with all of this going on, is it possible to buy a home or refinance an existing mortgage? The short answer is yes, but some things have changed.
Subprime loans are pretty much gone. Stated Income loans (sometimes referred to as "liar loans") will not be readily available, and the same goes for no and low documentation loans.
To get a mortgage loan today, you will need to provide proof of income, have decent credit, and have some down payment money. Although, there are still a few low and no down payment mortgages available, thanks to the federal government.
Federal Housing Administration insured mortgages have down payments as low as 3.5%.
The Department of Veterans Affairs guarantees mortgages with no down payment, and the
Department of Agriculture - Rural Housing Service does not require a down payment.