Why Nows the Time to Look at Your Mortgage

With 2009 still it its early months, let’s take a look at what we might see in the coming year.


If you’re unsure as to what you can afford – or you think that your credit profile might limit you – now is a good time to explore your options. This applies to both first-time buyers and long-time homeowners.

The Federal Housing Authority (FHA), which caters to borrowers with either less money to put down or who are credit-challenged (or both), has tightened its guidelines just a bit for 2009. However, it is still a very good place to start.

The FHA requires a 3.5% down payment, but all or part of this can come in the form of a gift from a relative.
Many of the closing costs can be financed by the seller by what is known as a seller concession.

There will be an upfront mortgage insurance premium of 1.75% of the loan amount, but this can be financed as well.  There also will be a monthly insurance premium assessed.


A challenge facing homeowners looking to refinance is their equity position – in other words, the value of their home.

Tentative borrowers might want to give their real estate agent a call and have him or her run what is called a Comparative Market Analysis, or CMA.  This is a list of comparable homes, excluding foreclosures and non-comparable properties that have sold in the area recently.

Mortgage lenders tend to give more credence to CMAs than to market analyses that include non-comparables and foreclosures.

Once borrowers have an idea of what their home is worth, they can, with the help of a lender, determine their options.

With rates being relatively low, it might be time to get out of that ARM or other higher fixed-rate loan you might be in right now.