For the past week or two, clients and business partners have been asking me if they are still able to get a loan. These questions have been coming from clients who are in the market to buy homes and from realtors that are showing homes.
Every day, a new story seems to come out about how our financial system is on the brink of destruction and we are seeing bank after bank either closing down or being taken over.
Yes, these are frightening facts that do paint a very bleak picture but most, if not all of it, has to do with the easy credit lending standards that we had over the past few years. The truth of the matter is that those 100% No Income Check Loans are a thing of the past BUT right now, banks are willing to lend on loans that make sense. FHA, in my opinion is the best mortgage to get these days and since FHA loans are insured by the government, lenders are willing to fund these loans with full faith and security.
YES,YOU CAN get a mortgage today, contrary to what you may hear. Mortgage rates are still at very low levels and my assumption is that they will only get lower.
The main problem we are having within the financial industry now is that Banks are not lending to banks and Corporate credit lines are being restricted or drying up all together. These are the problems that the bail out is dealing with. If businesses do not have credit lines they will not survive. American business runs on credit. Therefore, liquidity and faith in the banking system needs to be restored.
Last month Uncle Sam took over Fannie and Freddie and FHA is raising there loan limits. This was good news for the mortgage market since a major source of residential money is now secure. The FDIC has done a wonderful job of curing the failing banks and quickly shifting the nations deposits to stronger institutions with no more than a hic-up. The sky did not fall, and it probably will not fall.
Real Estate has always been a great long term investment. The economy has always had its ups and downs and Real Estate has always rebounded.
So, don't worry. There is money to lend, and at reasonable rates with very good terms.
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Mid-Island Mortgage Corp. | 900 Merchants Concourse | Suite 112 | Westbury | NY | 11590