"Back to the Future"- or How to Survive the Credit Crunch

The good news is that interest rates are lower than they’ve been in years, hovering around 5.6% for a 30 year, fixed-rate loan in Northeast Ohio.

The bad news is that, as the subprime crisis heats up and lenders feel the pain of foreclosures, getting a loan is getting harder – even for qualified buyers.

Nonetheless, if you are in the market to buy a home, you can take advantage of affordable home prices and low interest rates by playing it safe and smart. If you have a credit score above 620, you will generally be considered a prime customer, although other factors such as the amount of debt that you’re carrying and how much you want to borrow will factor into getting pre-approved. The biggest change is a movement by lenders away from the 100% financing that was typical just a couple of years ago. In other words, "back to the future" – a return to traditional standards in qualifying borrowers. Having a down payment, (minimum is typically 3%) should allow buyers to take advantage of the current market conditions to purchase property
at an affordable price and to get a good rate.

Why consider buying now?
According to Lawrence Yun, Chief Economist for the National Association of Realtors, "the 30 year fixed rate mortgage is forecast to rise slowly to the 5.9 percent range in the fourth quarter of 2008, and then average 6.3% in 2009."