Archive for September, 2008

I’m sure you have heard more than enough about the pending government bailout of Wall Street and all the bad mortgage debt that they own.  If you ask me, I say Wall Street needs to go down with the ship.  It was their greed and the games they played with a thing called derivatives that had as much to do with the mortgage meltdown as anything else.  That said, how will this affect the first time home buyer?

Bottom line is it will be way tougher to get a loan than any of your friends that bought a house 12 months ago.  Lenders, what few that are left, are being more and more picky about who gets a mortgage.  12 months ago someone with a 640 credit score and a low debt ratio would have qualified for as good a rate as almost anyone else.  Today a 640 score will cost the borrower severely in terms of a higher rate, almost a full 1% higher.  This means that today, looking at just one lenders rate sheet, if you have a credit score of 740, you would get a 30 year fixed rate of 6.0%.  If your score is 740, your rate would be more like 7.0%,  which makes a big difference in payment.  These new guidelines are from Fanni Mae and Freddie Mac, who I’m sure you have heard of in the news.  These are the two government regulated organization that made a market for mortgages.  These are also the two companies that recently were taken over by our government, which means you and I are part owners, because they were about to go bankrupt because of all the bad mortgage debt they had on their books.

We are in for some difficult times in the near future but it won’t last forever and if you are a first time home buyer with a high credit score and low debt, you will always be able to buy a home.  To find homes for sale, real estate and mls listings, visit