The unemployment rate has seen some drops over the past year, a larger percentage of houses are reasonably priced, rental prices have increased approximately 10% over the past few years and mortgage rates are just slightly higher than the all-time record lows we’ve seen in recent months.
So why aren’t more people running to their local lender signing up for a mortgage? Possibly two mortgage myths that a buyer needs 20% down to buy a house and have to have immaculate credit to get a loan are holding people back.
Well, the good news is that neither is true. Requirements for a mortgage aren’t has strict as they were at the beginning of the housing crisis. As a matter of fact, Freddie Mac is trying ot make it possible for more borrowers to meet the requirements. If qualified borrowers buy within a maximum amount for their area can get a loan with less than 20% down. Remember that any loan with less than 20% will require private mortgage insurance.
Fannie Mac is actually offering low-income and first time home buyers a conforming loan with at least a 3% down payment. These borrowers will still need to meet specific credit and income requirements.
Don’t forget Veterans and active duty military can qualify for VA loans and of course the FHA has mortgage program s as well. Again remembering the specific qualifications have to be met in both cases in order to get these loans but it Is not impossible.
It’s true that buyers with higher credit scores get better rates, but it isn’t true that borrowers with less than perfect credit cannot get a loan. Just remember, a buyer can get an FHA loan with a score of 580 or higher with 3.5% down and PMI. Note that a buyer will need a score of 650 or higher for Fannie Mac.
There are other myths such as lenders no longer do stated income or jumbo loans. If a buyer has a large portfolio of liquid assets, a lender won’t require income verification. It’s a good idea to investigate a loan, you may be able to still qualify if you meet some requirements but not others. Lenders will look at and take into consideration several criteria including but not limited to credit score, the down payment, assets, employment, credit history and previous property ownership.
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