Even though, we are still in a buyer's market (in some pocket of the neighborhoods in metro DC), in today's market - it has become more challenging than ever for buyers, especially those with less than stellar credit score and not enough income. Subprime is out, including NINJA (No-income, or asset or job) loans.
Added to the equation, those lenders which used to be doing business in the subprime and Alt A market, decided to stop lending. Mortgage lenders are feeling the pain. The safer type of financing that most lenders still offer is the conforming loans the kind of loans that FHA, Fannie Mae or Freddie Mac will buy.
In short, you really have to be 'prepared' not only financially, but understand what you need to do or have before going into the home buying process. It's back-to-basic approach.
The troubles in the subprime-mortgage market have led to tighter standards for all borrowers. Buyers and refinancers with sterling credit records won't feel the pinch. But lenders have reined in their underwriting rules for borrowers with less-than-perfect credit and for those seeking nontraditional loans that require a low initial payment or little verification of income. Now, rising home prices can no longer serve as the ultimate guarantor of a home loan.
Read more, here.