I’ve been the recipient of much love from Google as of late for the search terms “Mortgage Implosion.” What people really want to know about is the trouble with subprime lenders of late. Frankly, when the whole thing went down, I had no idea what was going on. That’s one of the main reasons why I brought on the Mortgage Godess….to explain it to me and everybody else. She broke it down Barney style. Now I’ve pretty much got the hang of it. Here’s what it means to the potential home buyer:

1) You can still buy a house. There’s no need to panic. There are still houses for sale, and there are still ways to get into them. There are many great first time home buyers programs out there that can even help you if you don’t have much of a down payment. Certain municipalities will even give you a grant for the down payment. I know…

2) Down payment required. I said there are great programs available if you don’t have much of a down payment. However, most experts agree that having no down payment is a dog that won’t hunt, so to speak. The whole “subprime mortgage thing” was a case of lenders approving loans for people with no money and sometimes bad credit to boot. As hard as it is to believe, people with bad credit and no money sometimes default on their mortgages. They’ve since learned their lesson, and it won’t be happening again any time soon. You probably need at least 3% down for most programs. Start saving.

I can see the mortgage brokers circling already, so a quick caveat. That doesn’t mean that there is no such thing as a no money down loan for somebody with bad credit…it just means that you probably can’t get one on terms favorable to you….which begs the question “Could you ever get a no money down load with bad credit on terms favorable to you?” Probably not, I suspect. That’s why there are so many foreclosures.

3) Fix your credit first. The better your credit, the better your chances of getting a mortgage product that you can live with. If your credit score is lower than dirt, you’re probably going to want to work on that before you apply for a mortgage. I can work with the Mortgage Godess and we can get you on a plan to be kicking butt and taking names within a year or two. It’s just a matter of knowing what to fix, really.

What it really all means is that we’re going “old school” for a while on mortgage loans. You will have to prove that you make a certain amount of money, and you will be approved for a mortgage that constitutes no more than a certain percentage of your income.

So, that’s my extremely amateur analysis of the mortgage implosion, and what it means to potential home buyers. If somebody cares to color my conjecture with a little actual knowledge, feel free to fire away. This is why I keep an expert on staff. Leah to the rescue!

Peep the original story, yo!