Buyers with good credit and a down payment will make out well - all others, prepare to pay.

Despite all the worry the stock market is having and that Hedge Funds are going under, the average American may be in luck if they are looking for a home loan. The crisis in the subprime mortgage market may actually be good news.

“Not only is it nothing to worry about, it’s an absolute positive,” said Loni Graiver, president of the Maine-based Cumberland County Mortgage. “Not only have [home] valuations come down, but [interest rates] are still historically low.”

The only catch to this being good for the average American is that you have to have good credit, which is a low debt to income ratio, a healthy down payment, verifiable income, and looking to finance less than $417,00 which is the cutoff for so called jumbo loans.

In order to get a rate between 6.2 and 7.5 percent you will need to be able to pay a down payment of at least 10 percent and have a FICO score of 620 or higher. However, if you want a rate below 7 percent you will probably have to have a FICO score of 660 or higher.

But, if you have a credit score of 620 or lower and need a subprime mortgage things can get pretty tricky. A lot of people who have qualified for credit are getting squeezed out of the market.

[via CNN Money]

Tags: Home Mortgage, Mortgage, Stock Market, Hedge Fund, Business, Fico

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