What mortgage opportunities will you find when you want to buy a house in this post-subprime world?
Regardless of fears and stories you may have heard about tight credit, mortgages are available.
In fact, interest rates are low -- 5ˆ percent for a 30-year fixed-rate mortgage, said Paul Lueken, president of the Illinois Association of Mortgage Professionals.
Riskier loans that did not make sense according to traditional underwriting standards are gone or have become very rare.
These include subprime mortgages designed for borrowers with bad credit that require little equity or down payment and little or no proof of income. Rates for these loans often escalate over the years.
Now 30-year fixed loans are popular again, credit scores are important and FHA mortgages are a choice for those who don't have large down payments.
Adjustable rate mortgages are less popular these days because rates are not much lower than 30-year fixed rate mortgages.
Experts recommend shopping around for rates and meeting with a mortgage representative to examine what options are available.
Remember, besides a down payment, with most mortgages there are $1,500 to $3,000 in closing costs and a few months of payments in savings required as a reserve.
