It has been easy to be a little unsettled with all the talk in the media over the last few days about different mortgage companies filing for bankruptcy. American Home Mortgages announcement sent the stock market dropping 400 points before noon.
When Washington Mutual and CountryWide Mortgage also stepped forward to say they too were having difficulties, the market looked like it wouldn’t recover. As I sat at home, I have to admit I was clueless as to understanding what was actually going on.
I listened as one reporter said there would be no more loans given out. That people would have to save up huge down payments to be eligible to buy a house, no longer would 'no down payment' options be available. I listened as they explained that this would affect every other industry-student loans, credit cards-the American way of life.
I have to admit I began to panic. So I did what every American does-I decided to try to figure it out on the internet. How is this going to affect me-Joe Normal? Here is what I found out:
What if it was my mortgage broker who went bankrupt? What do I do?
Experts say that it is essential for you to continue to make payments. I know depressing news-who doesn’t want a house that is free? Experts say this isn’t a time to stop payments or try to negotiate terms for missed payments. Just keep paying. One note is that consumers should not be penalized for late payments that need to go to a new address. So call your company and ask where to mail the payment or who the new company is that will be servicing your loan. You should be allowed a two month grace period.
Will I still be able to get a mortgage?
What has been reported that no more mortgages will be given is entirely off base. Borrowers with decent credit histories and verifiable income will still be approved. The difference is that there are fewer choices now available. Loans that will be harder to get are ones that the income can not be verified or ones that are so high Fannie Mae or the government will not insure.
So will I still be able to get a no-down payment loan?
The answer is yes. According to the experts, loans will still be available with little or no money down. The loans will require strong credit and verifiable income.
Hopefully, this will resolve quickly before too many people panic mainly the investors on Wall Street.
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