Raynor James asked:




As you know, the real estate market has changed dramatically in the last year. This means you must also change your way of thinking to take meet your goals in buying a home.

The first five to six years of this decade represented a golden age for real estate. Money was cheap and easy to borrow. This, in turn, spurred massive borrowing and the real estate market as a whole. The action was hot, fast and heavy. Homes would be on the market for less than a week. Prices shot up as did the appreciated value of properties.

The break neck pace of the real estate market could not be sustained. As was predictable a few years back, we are now in a flat to depreciating real estate market depending upon the geographic area. One of the reasons for this is the backlash in the mortgage industry.

The mortgage market during the early part of this decade arguably got completely out of control. Some lenders were reputed to be lending money without even checking the bona fides of borrowers! Those days are over and the backlash from a large number of loan defaults is being felt by the borrowers of today.

If you are looking to purchase a home in the near future, you need to re-asses the current financing market for real estate. Lenders are pulling back on the reigns and stiffening their lending practices. Given this fact, you might have more difficulty acquiring financing than you originally imagined. There are ways to avoid problems, however.

You first step should be to order your credit report from the big three credit reporting agencies – Equifax, TransUnion and Experian. Review the reports for any negative marks and deal with them. Over fifty percent of people have erroneous negative marks on their credit reports. Make sure you do not or, if you do, deal with them.

The second step is to get pre-approved for your loan. Lenders are tightening up their borrowing requirements, but nobody is entirely sure what that actually means. To avoid a problem where you are in escrow and cannot get financing, you should get a lender commitment before even shopping for a home. Make sure to get it in writing and pay a few dollars to have it binding on the lender.

The real estate and finance markets have definitely cooled off. That does not mean, however, that the sky has fallen. You can get a loan, but be prudent in going through the process.

Maurice

Kimberly Chang asked:




If you are having difficulty the mortgage loan that you want, then one technique you might consider is to find a co-signer for the loan. A co-singer is simply an individual willing to the sign the mortgage loan application with you. This means that he/she will share in the risks inherent in the loan. If the person who originally took out the loan defaults on his payments, the co-signer will be required to pay them instead.

What Getting a Co-signer Can Do for You

Getting a co-signer with good credit will help you get a loan bigger than you otherwise would. This is because the co-signer’s income will be added to yours in the computation for the loan size. Be careful though. If your co-signer is significantly in debt himself, his inclusion could add little or nothing to the qualifying loan amount.

Before you ask anyone to be a co-signer, you should make him aware of the risks he is taking. If possible, draft a written agreement between the two of you. This will prevent any misunderstandings from arising in the future. Note that there are only two ways for your co-signer to get off. One is for the debt to be repaid fully; the other way is for the lender to let him off the agreement.

Lucille