8. What about FHA?
The Federal Housing Administration, once a standard-bearer for backing mortgages with small down payments, will require 3.5 percent down as of Jan. 1, up from the current 3 percent. See FHA.com.
"FHA is still really a viable way for first-time buyers. They are the best game in town for someone who doesn't have 10 or 20 percent to put down," said Tom Atwood, an agent with the Currey Real Estate Group at Long & Foster's Federal Hill office, whose specialty is first-time buyers.
But the down payment increase has builders and agents worrying that it will knock some would-be newcomers out of the market at a time when the market needs every buyer it can get.
The change is taking place just as FHA has regained the cachet it lost a few years ago to now-vanished exotic lending. FHA went from providing 2 percent of loans in the Baltimore area in early 2007 to providing 38 percent of loans now, said Vito Simone, of the Simone Group of Yerman Witman Gaines & Conklin and president of the Greater Baltimore Board of Realtors.
9. Can I still refinance my home?
Maybe. Depends on you and your house.
"You have to really requalify. You are going to find the standards tougher," said Duobinis.
Also, the house may appraise for less than what you owe, especially if you bought in the past two years. Lenders want appraisals based on current comparables, not prices from last year.
The upshot: You may not get a refinancing offer, or get one that's of any value to you.
10. What should I do if I can't afford my mortgage?
Seek help ASAP to avoid foreclosure. Immediately contact the company servicing your loan; you may be able to work out a lower interest rate or payment reduction. Last week, the federal government announced a plan to help delinquent homeowners who have Freddie Mac or Fannie Mae loans. The plan goes into effect Dec. 15 and will allow borrowers who are at least three months behind to reduce their mortgage payment through lower interest rates, 40-year loans and deferred principal payments. The new monthly payment would be no more than 38 percent of monthly gross income.
Maryland officials recently inked pacts with six mortgage servicers, accounting for nearly one-quarter of the market. They promise a 60-day cooling off period during which delinquent borrowers can seek help. In addition, the loan servicers promise to provide contact people for Marylanders and to encourage their staff to work to modify loans before turning to foreclosure. State legislation that took effect in April extended the foreclosure timetable to 135 days.
