Reverse Mortgage Loan

A potential meltdown in the subprime mortgage market has economists calling for more slowing in the housing market. Not surprisingly, delinquency and foreclosure rates released last week are much higher for subprime borrowers.

How many homeowners have subprime loans in a metro area and how far behind those borrowers are on their monthly payments will dictate how much more these risky loans could drag down the housing market.

What has some watching Arizona is its high ranking for subprime loans, No. 2 nationally, only behind Nevada, according to the Mortgage Bankers Association of America. Almost 17 percent of all homeowners in Arizona have subprime loans. In Nevada, the rate is 19 percent. Florida is No. 3 with about 16 percent. .

Money available for first-time homebuyers

First-time homebuyers and qualifying veterans again have some help in achieving the American dream with the help of the Nevada Rural Housing Authority.

For the second time, the housing authority is offering down payment assistance and low-interest mortgages for qualifying first-time homebuyers and veterans.

"It truly is a grant," said Gary Longaker, executive director of NRHA. "You don't have to pay it back."

Borrowers are considered first-time homebuyers if they haven't owned a home in the past three years. Income requirements for Churchill County buyers are a maximum of $60,300 for a family of two or fewer or $69,345 for a family of three or more. The maximum value of a home in Churchill County eligible for the program is $237,031.

A press release from NRHA states President Bush signed legislation last year waiving the first-time home buying provision for veterans, allowing any veterans meeting income guidelines to become eligible.

3 steps to take before buying a home

A little time spent shoring up your credit, crafting your budget and organizing financial documents will go far in smoothing the way to a home purchase. Ideally, you can start working on your home buying project before you even start shopping for homes. Keep in mind that most buyers take eight weeks to actually shop for a home, according to a survey by the National Association of Realtors.

Your financial prep work should start well ahead of those eight weeks. "My advice is to start to talk to your local Realtor six months ahead of time," says Pat Vredevoogd Combs, a practicing residential broker in Grand Rapids, Mich, and president of the National Association of Realtors. "Most have a good handle on mortgage people in the area. And, there are a lot of really cool mortgage programs out there for first time buyers." For example, Combs says some local governments will offer interest rate or down payment subsidies to buyers who agree to buy a home in certain areas.