How To Qualify For A Mortgage In These Tough Economic Times – My Eye Witness News In Memphis – ABC 24 CW 30

Reported by: Kevin Holmes

Email:kholmes@myeyewitnessnews.comLast Update: 11:18 am

 

MEMPHIS, TN – A nationwide drive to sell homes before April 30th is on, in order to qualify for an $8,000 tax credit. Jerry Modesto has been selling homes for 12 years. With low prices and even lower interest rates, he expects potential buyers to take full advantage of the opportunities. “When you put all that together things are looking, I think things are looking very well.”

 

One thing that’s not looking so well is the pool of potential home buyers. Another problem is keeping people in those homes. In Memphis, the foreclosure rate for February grew to 2.09 percent. That’s up from 1.38 percent in February 2009. With a down economy Modesto says it’s become tougher for potential home buyers to qualify for a loan. “Because of previous lending tactics and things of that nature. But it is incredibly difficult to get a loan. You got to be qualified. You’ve got to have a good credit score. Your credit has to be in excellent shape. You’ve got to have between 3 and 5 percent down and that’s kind of tough.”

 

Experts say the first thing you should do is go to the mortgage company and tell them what you’re interested in. Then allow the bank or credit agency to tell you what you qualify for. You must have a down payment and money to cover closing costs. “It’s kind of the reverse of a couple years ago, when it was free and easy,” says Modesto. “Well it’s not free and easy anymore.”

 

Experts say those looking to buy a home after 2010 could face an uphill battle. Economists expect interest rates to climb. They say a 1 percent increase in the interest rate can raise the total cost of the purchase price by 19 percent.