John Bendall owner of Re/Max Classic Group answers some of the questions on consumers mind about current lending conditions.

With all the horror stories about the mortgage industry and foreclosures flooding the media homeowners are getting worried.  There is some confusion about what the average homeowner should be worried about.  Many people believe that market conditions are bound to affect them negatively sooner or later. What does the current state of affairs mean to you finances?  Fortunately we have had some good news with the lowering of interst rates by the Fed.

If you are currently searching for a home getting a loan may be a little more difficult due to current lending practices.  However, it is not likely that the average home buyer in Central New Jersey will be turned down for a home lone.  It may be more difficult to obtain one of the “no money down” loans that have been so popular over the last couple of years, but if that is the type of loan you are looking for they are still out there!  You may also have to come up with a good deal of documentation to prove that you qualify for a loan and that you will be able to pay it back.  Which ultimately is better for you as you will be less likely to suffer from buyers remorse with confidence that you are not getting in over your head.

As with any type of market whether or not it is a good time to buy depends largely on your personal circumstance.  There are benefits to buying in this market.  One is that stricter lending practices mean that it is unlikely that you will obtain a loan that you are unable to pay back.  Another is that your chance of finding a home that is perfect for you is great in a market where there are a number of homes for buyers to choose from.

On the negative side, if you find out that your mortgage lender declared bankruptcy make sure that you continue to make payments.  You do not want their credit difficulty to affect your credit adversely.  You should hear shortly about who will be taking over your loan and where future payments should be sent.  If your mortgage company goes out of business while you are in the process of getting a loan, don’t hesitate to start an application with another company immediately.

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