Now’s the time to get a great deal on a mortgage, but borrowers should shop around.

Rates are changing constantly and they differ widely among lenders. Borrowers typically need a FICO score of at least 720 for the best interest rates, although for a fee Fannie Mae and Freddie Mac will guarantee loans with FICO scores as low as the mid-600s. Having enough cash for a 20 percent down payment is also important. But borrowers can get loans with lower downpayment requirements. FHA, for instance, makes loans available for a minimum 3.5 percent down.

For a conforming loan, monthly mortgage payments can’t exceed 28 percent of gross income, while all debt payments, including student loans, can’t exceed 36 percent of gross income.

Source: Business Week, Peter Coy (12/31/2008)

Smart investors in all parts of the country are picking up fabulous housing bargains.

Bill Leon, president of Florida’s Broward (County) Real Estate Investors Association, has been buying and selling investment property for years, but he thinks today’s deals are unprecedented. “People are afraid not to sell because they don’t know where the bottom of the market is,” he says.

David Dweck, a hard-money lender, believes the best buys are in what he calls “workforce housing,” aging bungalows on small lots. They are selling for as little as 10 cents on the dollar compared to what they were going for in 2006, he says, then fixed up and resold or rented quickly.

“People have been beaten down by fear, negativity, constant media bombardment,” says Dweck. “There is a silver lining. The future looks bright.”

Sheresa Pompay, an associate with Hunt Real Estate ERA in Chandler, Ariz., says bad publicity is good for real estate investors. “I love the people who read about all the gloom and doom, because they stay on the sidelines and go, ‘It hasn’t hit bottom.’ Whatever. By the time everyone jumps back in, we’ll be out and doing something else.”

Fortune magazine predicts that these will be the 10 worst-performing real-estate markets – and the best places for finding bargains – in 2009:

Los Angeles, down -24.9 percent
Stockton, Calif., -24.7 percent
Riverside, Calif. -23.3 percent
Miami-Miami Beach, -22.8 percent
Sacramento, -22.2 percent
Santa Ana-Anaheim, Calif., -22 percent
Fresno, Calif., -21.6 percent
San Diego, Calif., 21.1 percent
Bakersfield, Calif., -20.9 percent
Washington, D.C., -19.9 percent

Source: Fortune, David Whitford (12/23/2008)