Low Rates, Large Home Inventory - A good time to buy

by Telesis Community Credit Union and Center for Personal Finance editors

With headlines about the IndyMac Bank failure and the sub-prime mortgage meltdown, it’s no wonder that potential buyers are wary. However, with low interest rates and an abundance of houses for sale, many at significantly reduced prices, it's a good time to take advantage of this buyer's market.

Make a plan to go after the American Dream:

• Get Pre-Qualified For A Loan. "Get pre-qualified and pre-approved," says Susan Tiffany, Director of Adult Finance Publications at Credit Union National Association's center for personal finance. Prequalification means you have given the loan officer information about your income, debts, and savings. This allows the lender to conduct a quick analysis to ensure you have sufficient income and assets to purchase a home. The process also helps determine how much money you're eligible to borrow before applying for the home loan.
  
  "Pre-approval, on the other hand, is when the lender reviews your application and credit report through the underwriting process," Tiffany says. When an underwriter examines and approves your application, this typically carries more weight than a prequalification opinion. More goes into determining what you can afford than just your monthly mortgage payment. You'll also want to take into account private mortgage insurance, homeowners insurance, property taxes, utility bills, and upkeep.

• Find A Realtor. Did you know that the average Realtor commission is 3% of the purchase price? If your dream home is $500,000, your Realtor stands to take home a $15,000 paycheck. Telesis has partnered with HomeSold, Inc. to assist our members with home buying and selling services that come with the incentive of a significant cash rebate. HomeSold has agreed to provide Telesis members with the very best in real estate services in addition to a 25% rebate of the 3% Realtor commission from the final home sale price. That's a savings of $3,750 on that $500,000 dream home if you utilize a HomeSold, Inc. Realtor.

• Know your Mortgage. Exotic mortgages with features like no down payment or interest only payments for a set number of years have recently made headlines. Many buyers who took advantage of these types of loans in recent years are now finding that they can't afford their homes once their loan rates adjusted higher or principal payments kicked-in. A Telesis Real Estate Specialist will help determine the mortgage that best fits your lifestyle and ensure you understand exactly what you're getting.

• Don't Wait For Prices to Drop Even Lower. If you really like a house and can afford it, don't procrastinate. Just because the housing market has slowed doesn't mean others aren't looking at the same house you are. Buyers are out there.

• Negotiate the Sale. Sellers who've had houses up for awhile might be eager to sell and may offer incentives such as paying part of the closing costs, paying taxes for the first year, or fixing up rooms that they otherwise might not have. Remember, homes generally are priced at what others in their area are selling for. Sellers who've already had to lower their asking price may not have much wiggle room to reduce the price again.

Contact Jennifer Mayes, your Telesis Real Estate Loan Specialist at (800) 895-8328 ext.3738 and ask about our attractive mortgage products and getting pre-approved for a home loan today!

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