Tuesday, June 14, 2011

5 Things To Know About Buying a Home in 2011

Before you head out to house-hunt in Lexington, here are 5 main things to know about mortgage lenders and getting a home loan in 2011, as pointed out by homebuyinginstitute.com. These points will help you get a better understanding of what you can expect.

1. It's harder to get a mortgage loan today- Due to the economic downturn in 2008, lenders have become much more strict when it comes to home loans. No longer will we see claims of “easy credit” as buyers will be expected to bring more to the table.

2. Good credit scores are more important than in the past- Credit scores did play a role in the home loan process, however, did not have the power to make or break a deal. In today’s market, lenders can turn you down based simply on your credit score. In addition, your FICO score will also play more of a role in the interest rate you get on your loan. While your credit score is not the only requirement for getting a home loan, it is the most vital. The bottom line? If you want to qualify for a home loan in Lexington, you’ll need a good credit score.

3. Down payments are a must- While the days of a no-money-down mortgage loan used to exist, they don’t any longer. Many home loans in 2011 will require at least 5% as a down payment. Of course an FHA loan will accept a lower down payment if your credit is in good order, but putting money down is necessary in today’s market. The best advice if thinking of buying a Lexington home in 2011 is to start saving! You’ll want enough in the back for a down payment as well as cash for closing costs and any additional expenses that will arise. Lenders will want to be sure that you’re well prepared to take on a home mortgage.

4. ARM loans only work in certain situations- Before the decline of the housing market, Adjustable-Mortgage rates were a common way to finance a home, and many feel they played a major role in the demise of the real estate market. If you failed to sell or refinance your home before the first adjustment period on the loan, the monthly payments increased and this left many in a tight spot. It’s vital to know whether a fixed or adjustable mortgage is right for you. Your Lexington Real Estate agent will be able to explain the pros and cons of each so that you feel completely comfortable with your decision.

5. Home loan rates will probably remain low throughout 2011- The great news is that experts say that home loan rates will remain low, most likely under 5%, for the entire year! While it may be a little harder to qualify for a home loan in 2011, the lower interest rate can save you thousands of dollars in the long run!

Buying a Lexington home can be an exciting and a little overwhelming all at the same time! There’s a lot of new information out there regarding the Lexington Real Estate market and it may be hard to sort through it all. As a Lexington Real Estate agent with years of experience in real estate and with buyers and sellers in Lexington; I can help the home buying process run as smooth and efficient as possible!

If you have any questions, I’d be happy to talk with you about the new home loan guidelines or any other questions you may have. I would also love to show you around Lexington and as well as any of the available homes on Lexington’s Real Estate market. I look forward to hearing from you and helping find the home of your dreams!

Theresa D'Antuono
Lexington MA Area Real Estate Agent
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