John Bendall owner of Re/Max Classic Group discusses the recent news regarding home loans.

You would have to be living under a rock to have not heard some of the many news stories recently regarding the number of foreclosures increasing in recent months.  The increasing media coverage dedicated to this topic may give many people some pause when signing mortgage papers.  For this reason I thought I’d point out a couple of things to consider when shopping for a home loan.

When applying for a home loan consider what you can actually afford to pay, not what the bank is willing to give you.  Creative financing like adjustable rate mortgages, interest only loans, and piggy back loans have not only been popular, they have often been the only way many people have been able to break into the housing market.  A decrease in home values and an increase in interest rates have put many borrowers upside down in their loans.  In addition to loan defaults in the sub prime market there have been increasing numbers of foreclosures among borrowers with good credit.  Contributing factors include unexpected illnesses, divorce, and job loss.  When thinking about a home loan it may be wise to think of some of the worst case scenarios you may face.  Have a contingency plan as to what you would do if you found yourself in these situations.

Above all you should be sure to work with a reputable Mortgage Representative who you can trust.  While shopping around online for bargains can seem like a money saving prospect, there are countless companies out there looking to make a one time loan.  They are not concerned with your repeat business so they often spring hidden fees on unsuspecting consumers at the last minute. Professional advice and guidance through this process can save you money and sleepless nights for years to come. With the professional guidance of a Mortgage Representative and a Real Estate Professional now is a great time to buy with confidence.

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