Homebuyers

I am a graduate student who will be graduating in May. At that time, I'll be starting a full-time job and looking to purchase a home for the first time. Because of some really stupid choices with credit cards in college, my credit score is pretty low. I'm working hard to pay off all of my debts, but this may take some time. I also have lots of student loans on my report. I'm a little concerned about qualifying for a home loan. Will I automatically be turned down because of my poor credit history, or will I be stuck with a high-interest loan?

With a rowhouse threatened by foreclosure as backdrop, Sen. Benjamin L. Cardin said yesterday he would work for passage of laws that would help homeowners stave off the loss of their homes and provide tax credits to first-time buyers in a market beset by a withering slump. "When you look around here, you see houses that are vulnerable," Cardin said as he stood on a sidewalk in Baltimore's tidy Ednor Gardens, where several houses displayed "For Sale" signs. "This is a great neighborhood.

A popular state home-buying assistance program that critics complained contributes to suburban sprawl has been renamed and retooled to encourage home shoppers to live closer to where they work. Smart Keys for Employees is the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development. Unveiled with little fanfare in April, the program offers qualifying home buyers grants of up to $5,000 to help pay settlement costs, if their new residence is within 10 miles of their workplace, or in the same county or municipality.

Sometimes homebuyers think they'll be able to get away with making a large purchase just after they've been approved for a mortgage. But charging up a ton of debt on your credit card before you've closed on your new home isn't a smart move. In fact, all that debt could sink your mortgage application and kill your real estate deal. When homebuyers go to get approved for a mortgage, the lender takes a snapshot of their financial life. The lender pulls a copy of the borrower's credit history and credit score, and then looks at bank account statements and tax returns.

It has become a lot tougher for first-time homebuyers to secure a mortgage these days. With the mortgage industry rocked by soaring delinquency and foreclosure rates, particularly in the subprime loans made to people with weaker credit, lenders have become much stricter about doling out the dough. They have tightened their credit standards, requiring higher down payments, better credit scores and more documentation on income and assets. These higher hurdles hit first-time homebuyers particularly hard, experts say. The buyers often struggle to accumulate a down payment.

Most homebuyers will have at least two opportunities to inspect their property before closing on the purchase. First, most buyers will include a contingency in the contract that allows them to have a professional home inspection done by the home inspector of their choice. This inspection typically happens right after the sales price has been agreed to, usually within a week or 10 days. If the home inspector finds anything wrong with the property, or decides further inspections (perhaps for radon, heating and air conditioning systems, or mold)

A Gaithersburg nonprofit that provides down payment assistance to homebuyers is battling a government plan to ban the practice by the end of the month. AmeriDream Inc. is one of the biggest groups that help low- and moderate-income buyers with the 3 percent down payment required for loans insured by the Federal Housing Administration. The aid is financed by money from home sellers. About a third of the 314,000 people who received FHA loans in the 2006 fiscal year had down payment assistance from nonprofits.

The Town Center Community Association will sponsor a seminar for first-time homebuyers from 7 p.m. to 8:30 p.m. Aug. 21 at Historic Oakland, 5430 Vantage Point Road. Harry Hearn of EXIT 1st Class Realty will speak. Refreshments will be provided. Admission is free. Information: 443-927-9137, Ext. 129. The community association will sponsor a seminar on "Gardening in Small Spaces," taught by landscape designer Ryun Wauls of the River Hill Garden Center, from 7 p.m. to 8:30 p.m. Aug. 14 at Historic Oakland.

If real estate finance is the art of the possible, what's possible right now for homebuyers and sellers worried about rising mortgage rates, Wall Street bond market jitters and soft home prices? Plenty. Although certain aspects of today's postboom marketplace might look scary on any given day, most of the traditional problem-solving tools of real estate finance are still at your disposal, whether you're a buyer or a seller. Interest rates of 6 3/4 percent and higher needn't be deal breakers or impediments to selling or buying.

Does anybody remember the old days when homebuyers actually made sizable down payments - often 20 percent or more - when they bought their first house? New national survey research reveals just how dated and quaint that concept has become in today's market, thanks to rocketing home prices that have far eclipsed buyers' incomes and savings. From mid-2005 to mid-2006, according to a statistical sampling of a representative group of 7,548 purchasers, nearly half of all first-time buyers financed the entire transaction, obtaining mortgages in the full amount of the home price.