What to know about mortgages in 2010

By Charlie Weiblen

Real Estate Broker/Owner with Archwood Properties

December 07, 2009 04:02 AM

The lending market is still tight. Do not expect to see any of the strict credit requirements disappearing. If anything, they may continue to strengthen until the economy is in full recovery mode.
You can expect to have to put more cash down up front for your loan. The down-payment requirement is potentially increasing at least 1.5%, possibly more. If implemented, this would come into play towards the end of 2010. Having a bigger down payment significantly increases your chances of getting a better interest rate.
Know your credit score! Know what's on your credit report and know what your bruises are, if you have any. For the best rates, lenders are requiring a minimum FICO score of 730.
If you're strapped for cash or have a lower credit rating, you can always turn to the FHA as a lending resource. They are more lenient with what the require from potential borrowers.
Expect and increase in interest rates between now and March 2010. Rates were as low as 4.9% in November but could rise to over 5.25 within 4 months. Mortgage costs will also increase as the economy recovers.