Old Ideas present us with new solutions, Creative Mortgage Financing for Consumers.

By Michael Mapes, The Responsible Mortgage Lender

10 years ago there was only a handful of ways to finance a home and by the way you better have had pretty decent credit and a down payment.  That was replaced in 1999-2000 by the over exuberance of lenders and brokers pushing tailor made, easy to process, approve and close sub prime and Alt A loans.  Gone was the rational of actually having a financial stack in your home.  Gone was the rational of ever thinking someone could actually pay back the loan and gone was the thought of credit quality.

As with all good things the party had to end.  Sad to say but it did.  In its wake the hangover effect has been like a heroin addict still searching for that next fix.  Homeowners are losing their home, Realtors and Mortgage Brokers are packing up shop and finding other jobs and Mortgage Banking operations like New Century Financial, Home 123 and American Home Mortgage has ceased to exist as companies.

Although the down turn in activity has led to the extinction of several companies and good mortgage products.  It has also spawned new and innovative uses for long last products that where once the back bone of the Housing Market.  As we shall see some new twists to some old products can still generate a home purchase:

• 30 year fixed rate loans where the seller can pay up to six months of house payments. 
• Lender paid Mortgage Insurance or Buyer Financed Mortgage Insurance.  (This feature lowers total housing costs by 22%)
• FHA and VA buy downs funded by the lender.
• State Bond programs which offer good credit families below market interest rates.
• 30 year No Doc, Stated Income and No Ratio programs for people with good credit and down payment (ideal for self employed or commissioned people)
• 40 year fixed rate loans offering the same protections as those of other fixed rate products.
• New FHA loan to be introduced in 2008 allowing for 1.5% down payment instead of the traditional 3%

While those with poor credit histories may not be able to buy today, a good lender will always work with these people to help them get their credit to where it needs to be in order to purchase.  However, as we have seen in the last few months home buyers wishing to purchase have found that rates are attractive and some lenders are still willing to be creative in its approach.  After all home ownership is still the number one investment families can make and it is still a great time to buy a home.

Michael Mapes can be reached at 757.599.1810 ext 225 or on the web at http://www.theresponsiblemortgagelender.com/