Mind Over Mortgages


What You Need To Know Before You Go House Hunting

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We know, it can be depressing:  you can’t even turn on the TV without catching reports about plummeting housing prices.  But could there be some Fab & Fru housing hope in the midst of all the gloomy news?

Some of our readers are wondering if the current crisis may give them the opportunity to go bargain hunting  – and perhaps own a home for the first time!  The current combination of low housing prices and low interest rates is certainly intriguing to all our Fabulous & Frugal friends.  Even if buying a home is years away for you, getting your financial house in order is a great exercise to undertake so you are informed – instead of overwhelmed – when your dream house finds you!

So, the good news is:  for those of you who have been waiting to buy — and held onto your nest egg — this just may be the opportunity you’ve been waiting for.  You just may be able to get a frugal price on a fabulous home – IF you can get a mortgage, that is….

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Getting a mortgage is harder than it has been in years and many of us don’t even know where to start. Even if you don’t follow the financial pages, chances are you are somewhat familiar with the foreclosure crisis affecting the housing market today.  Our nutshell version is as follows: In recent years, banks loosened their lending standards too much, allowing people to get in over their heads with mortgages they couldn’t really afford, which has led to an insane amount of foreclosures.  As a result, banks are now tightening their lending guidelines, making it harder to get a loan. But don’t let the nightly news scare you into thinking it is impossible to get a mortgage – it’s not!  Normal people just like you are still getting mortgages, if they qualify.

Yes, getting a mortgage is a complicated process, involving intimidating amounts of paperwork.  Luckily, Loan Officer Aaron Angel of the Manhattan Mortgage Company was kind enough to speak with me and boil the mortgage qualification process down to the basics.  So, if you’re in the market to buy a home or educate yourself for the future, get ready to take some notes from our new Fab & Fru friend.

Aaron encourages everyone looking to purchase their dream home (or starter home!) to consult with a local mortgage broker before beginning their search. Not only will a mortgage broker educate you on the different types of loans available and help you secure the best interest rate with a bank, but they can also help “pre-qualify” you for a certain loan amount.  Pre-qualifying for a mortgage will help you understand what price point you can afford before you go out looking, and it will give the seller of your potential pad confidence that you are able to secure the financing needed to purchase it.

The evaluation of your financial security and the size of the loan you are looking to finance both contribute to securing a mortgage and determining the interest rate for your loan. In order to pre-qualify, you will need to provide a lot of information to the mortgage broker and ultimately to a bank. Getting this info in order is a good exercise to do regardless of your timeline because it shows you how near – or far – you are from owning your own home.  This can be a great first step towards developing a plan of action.

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