Financing for real estate may be tougher these days, but it is not impossible. When it comes to buying a new home it is more important than ever to be prepared when qualifying for a new loan. Times have changed. The days of securing no-doc loans or loans with no money down are in the past. To get a loan today it is commonplace to put a minimum of 20% down. If you have the down payment money for a loan on a new home, that is the first step.

Qualifying for a mortgage involves stating a steady source of income, a good credit history, and a reasonable amount of debt. Similarly what will work against you is poor credit, unemployment, no down payment funds and lying on a loan application. In addition if you are self-employed you should expect to jump through some pretty big hoops.

If you want to buy a home do not despair. If buying a home is in your budget you will be able to work it out. If its not in your budget at the moment it is probably best that you wait until it is.

People love to say that there is more involved with buying a home than just money, and while this is indeed true, you cannot buy a home without it. When thinking about real estate and purchasing a new home an important first step is securing a mortgage. Before even stepping foot in a lender’s office take a good hard look at your finances.

Examine your household’s income and expenses and determine what you are capable of paying each month. Affordability has been calculated at a mortgage being 30% of your monthly income and a mortgage that swallows up over 35% of your monthly income is seen as unaffordable.

Be prepared when you approach a potential lender and check with at least three different lenders. Not every lender will offer the same deal. It is important to read between the lines and look at other costs involved. There might be closing costs, points to pay down, hidden fees, etc., do some research and read the fine print.

The more traditional mortgages are 15 and 30 year fixed rate loans. A 15 year loan will typically have a lower interest rate and obviously a shorter time to pay off the loan but will involve higher monthly payments. A 30 year fixed loan spreads the payments over twice the number of years and will have a higher interest rate but lower payments. If a traditional loan doesn’t fit the bill there are many creative financing options available, many unique to a particular situation.

While money isn’t everything but it is an important first step to buying a home. Click here to read an article from Yahoo Finance on the basics of mortgages.

There are a variety of ways to finance a home, some being more traditional while others are lumped in the creative category. One form of creative financing is called a wraparound loan. A wraparound loan, also called an all-inclusive mortgage, enables a home buyer an alternative when he/she is unable to secure a more traditional mortgage.

A wraparound loan is, in effect, a second loan on a home, being placed below an original mortgage it will include the unpaid balance of the original mortgage as well as whatever additional money is necessary for the buyer to purchase the home.

A wraparound loan benefits both the seller and the buyer, enabling the buyer to acquire a new home without qualifying for a loan and allowing the seller to choose a higher interest rate. This is a viable option for a home buyer who is unable to get a home loan on his own.

The tightening of the financial market coupled with stricter lending policies has created the basic need for alternative methods of lending. A wraparound loan is not always feasible but can offer a home buyer a unique financing opportunity in the right situation.

Low mortgage rates are doing the job to make real estate more affordable

Keeping mortgage rates low is helping to stimulate real estate across the Country.  For the past few months the public and private sectors have been putting their heads together to get our Country out of the mess we are in and real estate and lending have been the primary focus.  The lowering of mortgage rates and keeping the interest rates low has been playing a major role in turning real estate around and getting potential home buyers off of the sidelines and into property.  Low mortgage rates are helping keep the cost of buying real estate low, enticing people to buy property.

Mortgage rates have been holding at historically low rates.  The current average rate for a 30 year fixed mortgage is 5.12%.  The average rate for a 15 year fixed mortgage is 4.69%.  A recent article at Realty Times points out “Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors.”

There is a drive to continue to keep mortgage rates low as the low rates appear to be doing the trick as the real estate sales volume continues to increase across the Nation.

For more information about mortgage rates visit Realty Times by clicking here.