Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Sunday, February 3, 2008 Prime time to step into the real estate market? Despite turmoil in the mortgage industry, real estate agents say conditions are ripe for first-time homebuyers By Debra Smith, Herald Writer A few months ago, real estate agent Dan Hall began teaching home-buyer workshops after a long hiatus. The reason? Potential buyers were getting mixed messages about the local housing market from the media, he said. "It's so confusing," said Hall, who works with Preview Properties in Marysville. "There's really not much telling us what's going on in our local neighborhoods. What's happening in Seattle isn't what's happening in Marysville." Despite the doom-and-gloom headlines about what's happening in other real estate markets, the local market offers good opportunities for first-time and move-up buyers, Hall said. Interest rates are low. Prices have dropped slightly, although the median price of a home still hovers at $382,000 in Snohomish County. Inventory in the county is up 50 percent from this time last year, according to statistics from the Northwest Multiple Listing Service. What buyers won't find is the abundance of loans once available for borrowers with less than stellar credit, said Rick Tilton, senior loan officer for CTX Mortgage in Marysville. Most of those have disappeared in the last 10 months. However, he said the loan programs that are left are generally far less risky for buyers and encourage homebuyers to be invested in their purchases. First-time buyers can find loans with low or no down payment required, low private-mortgage insurance and rates that are comparable to those found in the conventional market. Nonprofit organizations such as Nehemiah and the Hart Program can provide down-payment assistance. The most common loans available for first-time buyers are government-insured loans from the Federal Housing Administration and programs from Fannie Mae, a company with a federal charter to make sure lenders have enough funds to lend to homebuyers at low rates. Some, such as Fannie Mae's MyCommunityMortgage, are aimed at low- to moderate-income buyers or buyers who have limited credit. Everyone who walks through the door expects a loan, and about 80 percent do qualify, Tilton said. If someone doesn't, it's usually because of too much debt, a bankruptcy or foreclosure in the last four years, or a history of late payments. Tilton said most people don't realize what drags down their scores, and he tries to help people develop plans for improving their scores. One criticism of FHA loans is that the loan limit, now $362,790 for a single-family home in this area, hasn't kept pace with the market, said Nathan Gorton, executive vice president of the Snohomish County-Camano Association of Realtors. That may change soon. A bill in a federal stimulus package just approved by the house would temporarily increase FHA loan limits to $417,000 in the Seattle-Bellevue-Everett area, Gorton said. That bill has yet to be approved by the Senate. People who want to buy a home should take a few basic steps, said Greg Rielly, a mortgage planner for the Mortgage Advisory Group in Everett. His recommendations: Get a mortgage-quality credit report, one that's more detailed than the free one provided at annualcreditreport.com. Meet with a local lender and a real estate agent, who can provide solid information about the market in the local area. Research not just interest rates but loan advisers and choose one with an established track record and professional connections in the community. Buyers can improve their credit scores by paying off debt, Rielly added. "Stop consuming and start conserving," Rielly said. And when it's time to buy the house, don't buy a house you can't afford, he added. "Don't look at it as your dream home," he said. "Look at it as a stepping stone." Reporter Debra Smith: 425-339-3197 or dsmith@heraldnet.com

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