THE TRUTH ABOUT GETTING A MORTGAGE: IT MAY NOT BE AS HARD AS YOU THINK.
In our sales meeting last week, the team discussed the plethora of articles we’ve seen lately in the media about the reduced amount of buyers applying for mortgages. Since interest rates have remained low and qualifying criteria have really not changed much, we believe that perception has changed. There are a lot of people who would like to buy a home but believe that the lenders have tightened up qualifying factors so much that they won’t be able to qualify for a loan. I’m happy to report that that is really not the case!
The biggest change in loan qualification is the amount of documentation that is now required. Prior to the housing crisis, a pay stub, tax return (but not always the schedules) and bank statement were about all you needed to get a loan. Now the lenders are requiring a bit more. They typically will need to have copies of your full federal tax returns for the past two years, including the schedules. You can also expect to provide paystubs for the last 30 days as well as bank statements for the past 60 days. The lender will want to review where your down payment is coming from and will be asking for the source of any uncommon deposits. That’s really about it… not so bad!
Keep in mind that the minimum down payment on FHA loans is typically just 3.5% and the full amount can be a gift from a family member. Conventional loans will require a 5% down payment and 100% can be gifted. VA loans are still the best deal around if you can qualify; 0% down and the seller can pay closing costs and pre-paid expenses plus there is no mortgage insurance required.
You can typically expect closing costs to run less than $2500 which includes lender and title fees, but not pre-paid expenses according to Ron Duranti at Peoples Mortgage.
For more information on buying a home, please visit our website by CLICKING HERE
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.By Bill Ryan, REMAX Infinity, The Ryan-Whyte Team 480-726-7000
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