Knoxville (WVLT) -- Why is your dream home still only a dream?
Are you afraid you won't qualify for the mortgage or that you can't pay the loan once you get it?
This week we have told you how the housing market in East Tennessee is changing.
You have also heard about how the mortgage meltdown is having an impact around the nation has cooled buying and lending a bit in our region.
So how can you avoid trouble or get out of it?
Barry and Sarah Conatser are a long way from bidding on a dream house.
They haven't even been pre-approval on a loan, but they're fully aware of the market.
"When we take this plunge, it's on us," the couple said. "It's not like buying a car, a car's a big step, but it's like buying ten cars."
“You have to come up with a true budget,” said Joe Garrison from the Consumer Credit Counseling Service. “It doesn't matter whether you make $20,000 a year, or $100,000 a year.
Credit counselors say mortgage companies will build your profile, your “lendability”, as much on what you've saved and spent as on what you earn.
If your credit card debt is more than 20 percent of your income, brace for a higher rate, smaller loan, or maybe no loan at all.
What about sweetheart rates, for very little down?
“Those are going to be for people who have wonderful credit,” Garrison said.
“There are folks that should be looking,” said Jim Ford from the Knoxville Area Association of Realtors. “We're continuing to say it’s a good time to buy because of high inventory and low interest rates.”
But Ford, a Knoxville area realtor said that what has slowed the market isn't a lack of qualified first-time home buyers, but instead a group of sellers.
“Guys who have to sell and can't,” ford said, “he's paid 200 but it's worth 205 now and it's sitting and he's got to go.”
“You can’t, not speak with your lender,” Garrison said. “If you see you're going to have a problem, you need to be pro-active and hit the problem ahead of time.”
Delaying can be devastating
Garrison said more than half the folks in foreclosure don't go to the lender before it comes to that.
SOT Joe Garrison
“If you come to us and you're three or four months behind on your mortgage, it's not necessarily too late,” he said. “It's a whole lot closer to being too late to come to us when you realize you’re not going to be able to make the payment with the income you have.”
Barry and Sarah Conatser are determined they won't let a house payment hold their budget hostage.
“It's balancing a whole lot of things here on a little bitty fine rope,” Barry said.
For some, one way to loosen the rope is to refinance, either to lower your payment or free up some cash for remodeling.
Tonight at 11 you will hear more about when it’s right for you to refinance and when it’s not worth the closing costs or in some cases, the higher monthly payment.