A recession brings on economic uncertainty. It's one of those spiral effects. Consumers aren't willing to spend money and banks aren't always willing to lend it.
Believe it or not, a recession is a good time to buy a home because interest rates tend to be lower which will save the buyer thousands of dollars. But never enter a home loan negotiation processed unprepared.
A high credit score is your key to getting in. Do not have a high credit score' Especially during a recession your chances of getting approved are very low and even if you are approved, the interest rates will be extraordinarily.
Money in the bank is needed secondly. A direct deposit, between 15-20% is needed along with reserves. Reserves are the money put aside in the bank for repayment of the first two to three months of the loan. The bank needs to make sure you have the appropriate income for the loan.
Always carry documents that verify employment, income, and assets. The individual cannot simply tell the lender he has a job and expect to win the loan. No, documentation includes paycheck stubs and bank account statements.
This documentation is even more important if you are applying for a home loan during a recession because you need to prove to the lender that you can afford the home loan and will make your monthly home loan payments. Be prepared to provide at least three months worth of documentation. Collect the necessary documentation and have it on hand prior to applying for the home loan in order to speed up the application and approval process.
Although the current economy does not look promising, do not fear the chance of earning a loan. Home loaners still need business, but they will remain more selective until the economy changes. Inform the lender that you are speaking with other lenders and they will be more inclined to offer a cheaper deal.
Buying a home can be time consuming and intimidating, and buying a home in a recession can be downright frightening. But with some preparation on your part, you should be able to qualify for a home loan with competitive rates. See your home loan provider for answers to your specific questions. They can take the time to examine your situation and come up with a home loan that best suits your needs, recession or not. - 29969
Believe it or not, a recession is a good time to buy a home because interest rates tend to be lower which will save the buyer thousands of dollars. But never enter a home loan negotiation processed unprepared.
A high credit score is your key to getting in. Do not have a high credit score' Especially during a recession your chances of getting approved are very low and even if you are approved, the interest rates will be extraordinarily.
Money in the bank is needed secondly. A direct deposit, between 15-20% is needed along with reserves. Reserves are the money put aside in the bank for repayment of the first two to three months of the loan. The bank needs to make sure you have the appropriate income for the loan.
Always carry documents that verify employment, income, and assets. The individual cannot simply tell the lender he has a job and expect to win the loan. No, documentation includes paycheck stubs and bank account statements.
This documentation is even more important if you are applying for a home loan during a recession because you need to prove to the lender that you can afford the home loan and will make your monthly home loan payments. Be prepared to provide at least three months worth of documentation. Collect the necessary documentation and have it on hand prior to applying for the home loan in order to speed up the application and approval process.
Although the current economy does not look promising, do not fear the chance of earning a loan. Home loaners still need business, but they will remain more selective until the economy changes. Inform the lender that you are speaking with other lenders and they will be more inclined to offer a cheaper deal.
Buying a home can be time consuming and intimidating, and buying a home in a recession can be downright frightening. But with some preparation on your part, you should be able to qualify for a home loan with competitive rates. See your home loan provider for answers to your specific questions. They can take the time to examine your situation and come up with a home loan that best suits your needs, recession or not. - 29969
About the Author:
Tom Martens is the content coordinator for South Arica?s leading Homeloans portal which amongst others offers Bond origination services for all major banks.
