Home-buying changes with economic downturn - KWWL - Eastern Iowa Breaking News, Weather, Closings

Home-buying changes with economic downturn

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by Jamie Grey

IOWA CITY (KWWL) -- Nationally, foreclosures up, banks closing down, and Fannie May and Freddie Mac using federal assistance. In Iowa, realtors say as a result two things are happening, a tightening lending market and more homes on the market.

All over eastern Iowa , for sale signs are popping up, and staying up.

"It used to be when a house sat on the market for forever, everyone started thinking there is something wrong with that house. That's why people aren't buying it. But that's not the case today," realtor Dee Miller said.

While there's more on the market, realtors say you shouldn't expect huge deals on houses in the Midwest.

"You hear all these horror stories about the market across the country. Here in our market, it's not that bad. Things are just taking longer to sell," Miller said.

These potential first-time buyers are learning the ropes of the housing market from how to find a lender to getting a home inspection.

"Knowledge is power. If you don't know what a closing is, if you don't know some of the terminology, then you're lost," Iowa City Home Ownership Coordinator Deb Briggs said.

The biggest concern for home buyers now is credit scores. The lending market is tightening so experts say you're most likely going need good credit or other factors like a savings account or job security to buy a home.

To get started and see if it's right for you to buy, experts say find realtors and lenders in the city you're looking to buy in.  Lenders say Iowa mortgage brokers have been cautious, so there isn't as big of a lending crisis in this state as in some others with risky lenders.

"A lot of people think that buying a house is really scary, and in a sense, it is scary. It's a major purchase, but if you're working with someone that really cares about you and explains the process from the beginning to the end . It's a lot easier for you," Miller said.

While it might be somewhat of a buyer's market, markets vary city to city. In Iowa City, realtors tell me that it's always been a transient community, so there will continue to be people buying and selling, even if it's slowed down a little bit right now.

For many people, coming up with a down payment is the hardest, and with the lending market tightening, many lenders are requiring one. Iowa City has federal grant money that gives eligible buyers up to a $10,000 loan toward a down payment. For more information on the down payment program, click here.

The Home buyer Education Class is two days over two weekends. The classes are given by the Iowa City Area Association of Realtors and the City of Iowa City Housing Authority (ICHA). This session of classes is being taped and will be available for viewing at the Iowa City office. For more information, call (319) 338-6460.

Online Reporter: Jamie Grey
Online Producer: Mike Verlo

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