Today's Real Estate Mortgage Environment

Mortgages have existed for as long as most of us remember. Few individuals would be able to achieve their goal/ dream of home ownership without one, and therefore, it would probably be helpful, to review what the present mortgage situation, scenario and environment is.

1. Mortgage rates continue to be at (or near) historic lows. When the interest rates are low, it means that more people might qualify for one, and that others might be able to afford more home. Although no one possesses a crystal ball and can guarantee or see the future, most economic indicators point to these rates gradually moving higher. Therefore, those wanting to buy a home, presently have a great opportunity.

2. Mortgage downpayment: While most conventional mortgages still require 20% down, there are new programs that some people will qualify for, that will now permit downpayments as low as 3%. Understand that while that might create a better situation for some, it will also mean a higher monthly carrying charge (payment)

3. Conventional vs Jumbo mortgages: Periodically, lending institutions change the amounts that necessitate taking out a jumbo mortgage. In the past, this generally brought forth a higher rate, but recently the jumbo rate has actually been lower than the conventional one.

4. Credit Rating: Ever since the economic credit crunch that occurred at the end of the last decade, most lending institutions have significantly tightened their qualifications required to obtain a mortgage. Today, in order to obtain the best rate, one must possess a credit rating equal to no lower than 720. 

5. Best advice - Get pre-approved in advance. Discuss the process informally with a qualified, recommended, mortgage professional. Have someone knowledgeable look at, review and assist you in transforming your personal credit report to the best possible, and do so before you begin the process.

These are only a few of the things one should know about today's mortgage world/ environment. Potential home buyers should thoroughly discuss the entire buying process with both their selected real estate professional and with a trusted, quality mortgage professional.