There is a potential problem that buyers have to face before they can move in to make a killing in the real estate market. They have to get financing. As bad as the real estate market is, the mortgage market is worse. Borrowing money these days is a difficult prospect.
The current credit crunch is making it difficult for people with even great credit to get funding. You can suffer along with the crowd or employ a secret strategy to move to the front of the approval line.
The key step is to remove the risk for lenders. To do this, you need to belly up to the bar and put a lot of money on the table as a down payment. We are talking 20 to 25 percent. When you slap down this type of cash, the lender views you as a very safe bet. First, you have built in equity that allows you to survive down periods. Second, the house is going to have to really lose a lot of value before the bank is at risk. This combination of factors makes you a very good risk for the bank and approval is pretty much assured assuming you have at least average credit.
Understanding the current mortgage mess is the key to getting lenders to work with you. What is the current problem? People are walking away from mortgage loans. Lenders are loath to risk this occurring on future loans. The down payment helps you remove the risk of default element from the equation. If you have decent credit, this should be enough to get you a loan.
Raynor James writes about what is involved in getting the best fixed rate mortgages for FSBOAmerica.org.