mortgage

5 reasons to get a new mortgage in 2012

Buying a personal residence
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Buying a personal residence

Economic uncertainty and volatile housing markets have kept so many homebuyers on the sidelines that mortgage purchase applications have dropped to a 15-year low in August, according to the Mortgage Bankers Association.

The lack of applications doesn't mean buying a home is a bad idea. In fact, quite the opposite is true, as depressed house prices and low mortgage rates have made homes more affordable.

The benefits of owning a home include federal income tax deductions and the satisfaction of not paying rent to a landlord, says Justin Lopatin, vice president of residential banking at Baytree National Bank & Trust in Chicago.

"The money you pay on your mortgage may be slightly higher," he says, "but at the end of the year, you get the mortgage interest write-off, so you get money back -- and you get to own your own property."

The slow pipeline of new applications can be blamed on the hurdles that buyers face in qualifying for loans. Chief among the challenges are a down payment and the ability to document at least two years of income, Lopatin says. Income documentation can be hard for people who've suffered temporary unemployment, are self-employed or have irregular wages.


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