Winning the Game of Real Estate

You’ve seen the headlines: house prices are down, foreclosures way up. Is there any good news? If you’re a first-time home buyer, yes indeed. From Chatham to Warwick, here’s the latest scoop on the Valley’s housing market


(page 7 of 10)

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With the nation’s financial meltdown, “we’re definitely back to basics involving lending,” says Arnold Restivo, regional lending manager at Tuthill Finance in Fishkill. Part of what caused the housing collapse, he notes, was that — for various reasons — people were allowed to borrow more money than they could afford. “Eventually they couldn’t make their mortgage payments, and it became a negative spiral,” he says.

“Today’s mortgage market is more like the ones we had in the past, like in the ’90s. It’s based again on ‘the three Cs’ of lending: character — your credit and willingness to make the payments; capacity — your income, ability to pay; and third, your collateral,” says Restivo, who also offers consumer counseling services and education programs through the Cornell Cooperative Extension.

He points out that the days of zero-percent down are gone; now, you need to put a minimum of 3.5 percent down on a home. And of course, the larger the down payment, the better your loan terms will be. “We’re back to the basics of lending,” he says. “There’s no big magic out there.”

But mortgage bargains do abound for buyers in today’s market, especially if your credit is sterling, Restivo says. “But you still have to do your homework. Get a loan commitment before you start shopping; make sure everything is in order ahead of time. You’ll need to have all your ducks in a row. In this market you’re going to need to have reasonable credit: a 620 mortgage credit score or better. (During the bubble, less than 500 would have sufficed. Then, a 560 credit score could have gotten you 100 percent financing.) And you must be able to demonstrate your willingness and ability to make those mortgage payments.”

To improve your credit rating, Restivo suggests keeping credit-card balances at one-half or less of your spending limit. “For example, if you have a card with a $10,000 limit, you want to avoid having more than a $5,000 balance on it.” Also, pay your bills on time and don’t pay off a large percentage of revolving debt in one hit.

And if you’ve got an existing mortgage at a rate that’s relatively high, taking action now might be a smart move. “This is the perfect time for refinancing,” says Adele Arnell George. “In fact, some lenders are facing delays in writing new mortgages for qualified buyers because of the piles of re-fi applications that are sitting on their desks.”

Along with real-estate professionals, the state can be another resource if you need mortgage advice or assistance. The State of New York Mortgage Agency (SONYMA) offers six mortgage plans that can help many residents purchase a home, including first-time buyers (some programs are also available to non-first-time purchasers), veterans, and others. Go to or call their hotline at 800-382-4663.


Next: Avoid the “F” word


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