REO Financing Is Available

Financing is available to get borrowers into bank-owned properties. Even though there is not the wide variety of mortgage products that were around a few years ago, prospective home-buyers can get loans thru FHA, VA and of course, conventioanl means.

Yes, if you are an independent contractor and cannot show a W-2 that you get from your employer, it's much more difficult to find somebody to finance you, but it can be done.

If you have the right person helping you and have steady income, pay your bills in a timely manner, and if your debt ratio is reasonable, you can get a loan to buy a house. The areas that present more of a challenge are the higher priced areas where VA and FHA financing is topped out. This would at the $700,000 level and higher. Jumbo loans are still difficult to locate. But the other markets are still very active.

Opportunities at the local level still exist to buy homes. Rehab loans enable borrowers to take a home that needs work and do their own repairs. FHA 203(k) loans permit a buyer to purchase a house and establish an escrow with the money they need to fix it up the way they want. This is very exciting because you can get a great deal, have a house that is nice and it's fixed up the way you want it, financed, all in one package.

Many are waiting for the foreclosure pipeline to open during the second and third quarters of 2010. Some areas in the United States still need to see further value decline before foreclosures go through the pipeline and the overall housing market picks up, putting more REO properties back on the market.

At that point, prices for properties all over the nation will get back in the situation where they are increasing, not at the levels created in the bubble, but at traditional levels where you have a 2%, 3% and 4% appreciation per year.

One positive thing that has come out of the real estate market crash is that prices have come back down to where people who could not afford to buy three years ago can now afford to purchase a home.

They are now looking at an affordable price range for the type and size of house they need. These people are still interested in buying and want to buy.

Today, there are houses that have lost 50% or more in value and the industry has never before seen such dramatic percentage drops.

Another plus for home buyers is that interest rates continue to remain low, nothing like back in the early 1980's where they were as high as 19%. For most, it was very difficult back then to sell a home (unless they used seller financing which was plentiful) because the rates were so high and nobody could afford financing. Many products that we are familiar with today, originated back then because no one could afford to get a 19% fixed-rate loan.

The mortgage industry changes every year and no matter how long you have been in it, there are things that are new and quite exciting, especially the technology. More and more people are shopping for their homes on the internet.

It may take 5, 10, 15 years or even longer for the prices to rebound to reasonable market levels and now is the perfect time for consumers to begin looking.

For those looking for a good home loan, they should educate themselves to work with an agent and understand what the market is so they can get a good buy on a property and not waste their time throwing out rediculous low-ball offers that end up not getting accepted while somebody else scoops up the home they wanted by somebody who came in with a more reasonable offer.

Larry Potter

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