With all of the activity in the real estate market right now it is a great time to become a homeowner. One lesson to be learned from the collapse of the housing market is to look before we leap, so there are some things that buyers should be aware of before purchasing a home.
Mortgages are not as easy to qualify for as they once were. Lenders are stricter than ever regarding their guidelines for mortgage approval. Down payments will be in the 20 % range for those homebuyers who want to qualify for the best available interest rates through traditional mortgage lenders. The credit scores needed to qualify for these loans will be higher as well. Just a few years ago a FICO score of 650 was enough to qualify for a loan. Since the mortgage crisis, you will need a 730 or better to qualify. Traditional lenders are much more cautious since the housing market collapse, so it will be a bit harder to get a loan. The good news on the stricter lending practices is if you do qualify, you will have a solid mortgage at a great interest rate with no PMI and 20% equity in your new home.
There are alternatives if the traditional lending guidelines out of your reach. The Federal Housing Authority (FHA) is available to assist you in getting a loan. They have loan programs that are a little easier to qualify for than the mortgages found at traditional banks or mortgage lenders. A qualifying credit score can be a little lower than with a conventional loan and the down payments needed can be as low at 3 ½ percent.
Although the economic recovery is fantastic news, it is also likely to increase interest rates and home prices in the future. If you have the credit scores to take advantage of the best possible rates, there are great opportunities available for homebuyers and investors. In 2011 and beyond, there are going to be some tremendous opportunities in real estate, and not only for the buyers. There are going to be some fantastic opportunities for anyone considering a career with a real estate license.
Careers in real estate are expected to grow 14% by 2018 according to the Bureau of Labor Statistics. In most states, the real estate training required to sit for a real estate license exam can be completed in a matter of weeks. In addition, the cost of earning a real estate license is just a fraction of the cost of a single college course. In fact, in some states it is less than the cost of the books for one college class.
There are many things to consider when buying a home. There is a great deal of opportunity in today’s real estate market for both the homebuyer, as well as for anyone in the market for a lucrative new career with a real estate license.
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About David Goldstein — David Goldstein is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.