Let's say that in October 2010 you were preapproved for a certain amount, but you have put off your home search for the holidays. Well, you may be surprised to learn that you no longer qualify for the cost of the home you want to purchase.
Why?
Two main reasons: First, interest rates have increased; and second, credit card changes were just put into effect.
Freddie Mac's interest rates for the average 30 year fixed rate mortgage were at 4.19% on October 14, 2010. On December 23, 2010, they were at 4.81%. On a $300,000 FHA mortgage, it can result in a monthly payment that is about $107 higher, or more than $38,000 over the life of your 30-year loan.
The credit card companies have recently lowered credit limits, which could result in lowering FICO scores for many people who have revolving debt on their credit cards.
So, if you were preapproved more than a month ago, you may want to contact your loan officer to have your preapproval reviewed, before you go out looking at houses again.
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About the author: The above article was provided by Bob Willis, a locally recognized Realtor®.
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