How the Media Are Hurting the Economy

I was speaking with a potential client today, and after telling him what I could do to help him refinance his home, he asks me, "is it really this simple?" I let him know that it was really that simple.

Wherever you turn, whether it be your local news or CNN or Fox News, you are hearing that the housing industry is terrible and that no one can get financing right now. That is simply not true. Yes, the housing market and lending industry has taken a tumble, but this does not mean that you can not buy a home or refinance your home.

We have seen a sharp decline in clients interested in doing anything with their finances lately because ll they hear is bad news. I saw a report today that showed home foreclosures were up 25% from October of 2007. This information scares people, and it gets them to thinking that if things are this bad, and lending has dried up then we can not buy a home, or refinance our home.

Let me tell you the truth. While it is true, that things have tightened and some loan programs have gone away, things are still not that bad. FHA and Conventional financing is still 97%, which means you would have to put 3% down. You do not have to have perfect credit and interest rates are still amazing. Conventional financing is a little tougher because they do have stricter guidelines, but it is still available. FHA has much looser credit guidelines, so you do not have perfect credit to get financing. You can't have bad or poor credit, but it doesn't have to be perfect. There is also something called a Rural Development loan. This and VA loan are the only true 100% loans out there now. Rural Development is truly no down payment. Once again, you do not have to have perfect credit, and interest rates are very good. The biggest down fall of this loan is, it is not available in every area. By definition is is for rural properties or small communities. I live in an area with several smaller towns and a couple larger ones. The largest population is around 50,000, and it is not eligible. However, the smaller ones (around 10-15,000) are eligible.

Most people do not have a clue what their credit score is, and if they do, they are not sure if it's good or bad. Well, here's a breakdown; There are three major credit bureaus, Equifax, Experian, and Transunion, and each will have a different credit score. The credit scores range from 350-850. Obviously, the higher the score the better. Most people consider anything above a 720 credit score excellent. 680-720 is very good, 640-680 good, 620-640 average, 580-620 below average and anything below a 580 is considered poor. Each lending institution or creditor will put their own credit limitations on their lending policies, but this gives you the general idea. If your credit score is above 620 you still have a good shot at getting a home loan (and even if it's not it does not disqualify you from getting a home loan). If your credit is anywhere in the below average or poor range, I suggest you talk with someone that will help you get your credit score up. There are plenty of people like me, who do not charge for this service so be careful when talking to someone who wants you to pay hundreds and hundreds of dollars for this.

The bottom line is, it's not as bad as you think it is. If you want to look into buying a house or refinancing your home, or even buying a car, there are still plenty of ways to go about it. Don't just not try because you don't think you can buy in today's market. Find out exactly what you can do. You've heard the saying knowledge is power, and it is no different in this case.