KNOW YOUR MORTGAGE OPTIONS

If any of your friends or family has recently applied for a home loan in the Houston Real Estate market, you've probably heard that lenders are nervous, with tough new rules and demands for stacks of paperwork. Good mortgages are still out there, but you should be prepared before applying.

First, understand how your credit score impacts the interest rate charged on your loan. If your score is 720 or higher on the scale of 850, you will qualify for the best rates. If it's between 700 and 719, you could expect 0.375% added to that rate, while a score between 680 and 699 might add 0.5%.

Next, determine how much you have available for down payment, and how that will affect your loan's terms. A "conforming loan" (that would be purchased by Fannie Mae or Freddie Mac) will require a minimum 10% down payment.

However, if you don't have that much to put down, you can investigate a Federal Housing Administration (FHA) or Veterans Administration (VA) loan. These government-backed loans are targeted towards those with lower credit scores and only require a 3.5% down payment.

You can even use the First Time Homebuyer $8,000 Tax Credit (recently extended to April 30, 2010) or Repeat Home Buyer $6,500 Tax Credit (recently introduced and runs through April 30, 2010) to help pay closing costs, buy down the interest rate, or add to your minimum down payment. Just have employment, banking and tax records organized, and be patient while overworked lenders review your application.

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To learn more about the overall Houston real estate market or Houston homes for sale, please visit our website.

Mark W. Martin is President of 2M Realty, a Texas Real Estate Broker and Houston Realtor. He develops land in north Houston, and more specifically the Porter real estate, Conroe real estate, Humble real estate and Kingwood real estate markets.