The lending market has changed substantially in the last few years.  We give the quick rundown on a few helpful things to remember when looking for a loan.

1.) FHA Loans are available to all buyers.

When prospective buyers were surveyed, nearly 50% thought FHA loans were for first time buyers only.  These loans are actually available to all prospective buyers who meet the requirements and carry great benefits such as lower down payment and cost.

FHA Loans require the following:
     -3.5% down payment
     -3-6% of the purchase price for closing costs (can be a credit from the seller)
     -640 FICO score - middle score from three bureaus is used (sometimes lower is acceptable)

Lenders will want to see documentation of income, asset and job history, current paycheck stubs, two months' bank statements, and two years of tax returns.

In addition to the above requirements, the special cases below apply:
     -a minimum of two years have passed since the discharge of a bankruptcy
     -a minimum of three years have passed since foreclosure
     -a minimum of zero to three years have passed since a short sale (case-by-case)

2.) Mortgage rates vary daily.

Most people don't realize it, but mortgage rates vary by the day.  The mortgage rates are mostly tied to the 10-year treasury bond and will move in conjunction with it.  Depending on economic news, it can move multiple times within a day.  Watch these rates daily - a small difference of
.125% or .25% can mean thousands per year in savings.

3.) Lender fees are negotiable.

When you obtain a loan, much of what you pay for at the closing table is going to be fees.  These fees - including origination cost, credit report fees, appraisal fees, and document fees - are all negotiable.  It's smart to have multiple lenders give quotes and compare the fees.  If you like the more expensive one, you can always negotiate the fees down.

4.) "Pre-qualified" doesn't mean "Approved."

When a lender "pre-qualifies" you, they simply approximate how much you can afford.  At this time, the lender doesn't run your credit or verify any of the facts you provide.  You don't have a solid commitment until the lender runs your credit, verifies the documentation, and has approved your loan application without condition.

About the Author:

Michael Blount Jr is the Broker of Blount Properties and lives in The Woodlands, TX.  Michael is experienced in both residential and commercial real estate and analyzes the market trends to better serve his clients.  Michael has served the greater Houston metro area for over 10 years. 

For more information – visit www.BlountUSA.com or find Blount Properties on FaceBook.