There is a lot of talk about the slow housing market and about how lenders who have loaned liberally for years are now tightening their belts.  All of this is true, but there are still mortgages available for many homebuyers.

Qualified buyers can still get conforming and FHA insured mortgages.  Qualified being the optimal word.  The real difference in the housing market today is that lenders are following stricter lending policies.  Now to be considered a qualified buyer, you have to walk through the door with all of your documents in hand.  W-2s, tax returns, bank statements and pay stubs, whatever you have to prove you have the cash now and will continue to have the cash coming, you need to bring to the lender’s office with you.

Three years ago a borrower with a good credit score and strong employment history could have refinanced or financed a loan, no problem.  This is the most prominent change in lending practices, now you every loan is a full documented loan.  If you can’t prove your financial status, you don’t get a loan.  This is further limited borrower’s abilities because if you don’t have the right stuff, then you are going to get hit with more fees and less likely you will be able to afford the loan at all.

The other big change is in down payments.  It was typical three years ago to plan on having 5% down.  Now most homebuyers will need to have 10% or more down depending on the location of the property to be purchased. 

These changes don’t rule out all buyers, just those that really aren’t financially read to purchase a home.  Buyers with good long-term employment, a solid nest egg for investing and an excellent credit score (700 or better as of October) are the buyers to find.  It is these individuals who can take advantage of the slow market as well by having a much larger selection of homes at below market values.