Mortgage loan programs have been undergoing significant changes. Lenders ( financial institutions and mortgage brokers) now require a higher down payment than in the past, up to 20% on many loan programs, as well as a minimum credit score of 720 to 740 for home buyers to get the lowest available interest rates . Newspaper, television and radio advertising touting very low mortgage interest rates do not explain the stipulations that exist in order for borrowers to qualify for a mortgage at these advertised rates. Once you have read this book, you will clearly understand the implications of these stricter loan requirements and their impact on your ability to afford a home.

Another key factor adding to the chaos and confusion in the housing market is the home appraisal process and its impact on a market experiencing declining home values . When home prices were going up consistently, there were few problems with the appraisal when getting mortgages approved. Once the market fell apart, many home sales were delayed or cancelled because lenders would not agree with the appraised value . That problem continues to exist today. The uncertainty of a property's value, not necessarily a problem with the buyer's qualifications, can be the reason for a loan being denied. A local lender , with intimate knowledge of the local market, may offer the best option for getting appraisal issues resolved . This may especially be true when purchasing a condominium or other unique properties, such as farms. The book will also explain the importance of using a local lender to finance your home purchase as a local lender will typically apply “common sense” to an underwriting decision .

For buyers, the book provides an understanding of credit scores and how they are used by lenders , how to decipher interest rates and the importance of getting a loan pre-approved before starting the house hunting process . First time homebuyers have more financing options available than at any time in recent history . I review the various types of loan programs with the intent to get the homebuyer to focus on what types of loans or grants they may be eligible for. Also provided is an appendix with specific information on various state and federal loan programs. This appendix includes contact information for the agencies offering these programs. I have also created a website, www.homesbuyersandmortgages.com that provides easy access to continually updated information. The book contains a section answering the question of “How much home can you afford?” with emphasis on those expenses that many homebuyers do not think of when considering their monthly payments. Another section focuses on distressed properties with an emphasis on where to search on the Internet to find these properties. The sheer volume of distressed properties has also presented investors with great opportunities. These are also discussed. Finally, I have a chapter devoted to the importance of using a Real Estate professional and why buyers need that expertise, now more than ever, to complete the home buying process.

Existing homeowners face a different set of issues. With one major bank forecasting that half of all mortgages will be “underwater” by 2011, options available to homeowners to sell their property to upgrade or downsize, are limited. The “buy and bail” phenomenon that occurred last year was stopped once Fannie Mae and FHA modified their lending guidelines , which effectively restricted homeowners from purchasing a new primary residence and then simply walking away from their current residence. I discuss the implications of “buy and bail” and what homeowners facing this situation can do. Another key issue that I cover is the conflict between the conservative approach taken by lenders in reviewing appraisals and homeowners overpricing their homes. You will also learn that property values are being directly impacted by the prices of distressed property sales (short sales and foreclosures) in virtually every local market and how this fact may impact your buying decision.