Relaxed Mortgage Guidelines Open Door for Home Buyers
The lending pointers have currently began to loosen up simply a chunk...
Renters who idea that buying their own home changed into out of attain might also now be capable of comprehend their dream of domestic possession.
Relaxed Mortgage Guidelines Open Door for Home Buyers
What hasn't changed is the 3 main factors that are considered in determining one's capacity to repay a loan.
The three main factors that lenders are always looking for are
Credit score - your credit score is the main determining factor. The higher your credit score, the more loan options you will have
Job stability - typically, it is best if you have been employed for 2 years or more by the same employer
Income - can you afford the house along with the balance of your monthly expenses with some breathing room for out of the norm expenses?
Since the real estate meltdown, many banks tightened their guidelines and were offering loans based on traditional 20% down payment or perfect credit. Those without either/or would be unable to qualify for a mortgage.
But not anymore! The good news is that some financial institutions are beginning to propose new, less rigid guidelines.
The mortgage guidelines described below will certainly help more borrowers qualify for homes and achieve homeownership. Not to mention that the more relaxed rules will hopefully breathe new life into South Florida's housing market (and that's great for lots of people!)
My hope is that many financial institutions will follow suit, offering similar programs, which would result in more options for those interested in purchasing a home.
Below are some of the new mortgage guidelines that I thought should be shared. Traditionally, Federal Housing Administration (FHA) offers the best programs for those with less-than-ideal credit. However, the figures below are not through FHA, and this program may give FHA a run for their money...
I've broken down the guidelines into different categories, based on credit score and property occupancy
Primary Residence: Purchase or Rate/Term Refinance
- Maximum Loan-To-Value (LTV): 97%*
- Minimum Credit Score: 680 FICO
- Property Type: Single Family, (Planned Unit Development (PUD), Condominium**
- Loans must receive an automated underwriting approval
Primary Residence: Purchase or Rate/Term Refinance
- Maximum Loan-To-Value (LTV): 95%*
- Minimum Credit Score: 620 FICO
- Property Type: Single Family, (Planned Unit Development (PUD), Condominium**
- Loans must receive an automated underwriting approval
Second Home: Purchase or Rate/Term Refinance
- Maximum Loan-To-Value (LTV): 90%*
- Minimum Credit Score: 620 FICO
- Property Type: Single Family, (Planned Unit Development (PUD), Condominium**
- Loans must receive an automated underwriting approval
Loans - Condominium excluded in Miami-Dade and Broward County
The above mortgage program is proof that even with a little bit of money, and an average credit rating, the chance of qualifying for a mortgage has just increased! This is an excellent program for first-time homebuyers.
Even more good news for those who have had lots of bad news in the past: Lenders are now allowing borrowers who have major credit challenges in the past to qualify for a mortgage. So, even if you have filed for either a Chapter 7 or Chapter 13 bankruptcy in the past, it may not mess up your chances (provided at least 2 years have passed since filing).
It's been quite a while since we've seen mortgage guidelines like the ones I described above. So if you've been waiting around for the opportunity to buy, now may be your time to get out of a rental and invest and create a home of your own!
Just make sure you speak with a seasoned mortgage broker who can help you to determine what you can qualify for, and the best program to meet your needs.
That's the discussion in this article that I've summarized about Relaxed Mortgage Guidelines Open Door for Home Buyers. Hopefully it can be useful and add insight.
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