Recession Watch: What to do if you're trying to buy a house

If you are interested in purchasing a home, now may be the right time to begin investigating your options. We are in the throes of a double downswing of the costs associated with entering the single family home market. What this means is that as real estate prices are deflating regionally, the interest rates on first mortgage loans to buy those properties are at rock-bottom levels. Deflated real estate markets aren't always bad things, when you're in the mood to buy some.

The tough part of the proposition right now is that bank money is very tight. When I bought my first home, a 2% down payment would get you a mortgage. In the current banking conditions, banks are sometimes seeking as much as 10% to 30% down payments on first mortgages. Here are some of the things you should consider if you want to do business in today's mortgage climate.

Our credit score is critical. Go over your credit reports with careful detail. Bring any errors to the attention of the reporting agency and clear up any outstanding issues. If your credit report and budget are a total mess, consider paying for a couple hours with a CPA who specializes in household finances and investing. They can help you understand how to get back on track. As always, a poor credit rating will be reflected in the mortgage terms you are offered. Today's bankers are more closely scrutinizing how we look on the books.