State of Lending: 1st Quarter 2009

by Tom Matteson
PMF Mortgages
tmatteson77@pmfmortgages.com
813-469-9762



Despite plenty of houses on the market, and interest rates at nearly 4%, buying a home has become a challenging affair in this country. With Bail-Out money still not distributed to the companies who really need it, lending restrictions are getting much tighter. However, it’s not all doom and gloom. If you pay your bills on time, have steady income, and a credit score above 600 you will have no problem finding financing. Right now banks and lenders are relying heavily on assets and credit scores. Simply put, banks want to know that you can pay them back. One way to show a lender that you are credit worthy, is by having at least three months of the projected mortgage payments in an interest bearing account, prior to securing financing.

There are still lenders out there servicing loans with credit scores of 550, but their interest rates are not the best, and their fees are much higher. Therefore, your personal credit score is more important than ever in residential home financing. If your credit is not perfect, or if it needs work, there are plenty of credit repair companies out there who can assist you. However, buyer beware… there are a lot of rip off artists out there. It is imperative to do background checks on these companies. Make sure they are in good standing with the BBB, and ask for referrals. Get phone numbers and contact the people yourself. Do not accept typed letters, or emails from some fictitious person, anyone one can do that.

The main thing with credit repair is to work with the company you have selected… do what they say. It is a team effort, it is their job to dispute the debts, it is your job to make payments on time and to add new lines of credit. This is definitely a recipe for success when it comes to repairing your credit. In closing I say to everyone out there, hold tight, things will get better, by the the final quarter of 2009 the financial system will be stabilized. We do not have any other options, but to make it so.