The Basics of Home Financing in 2013

Changes within the Mortgage Industry have occurred quickly and become a constant over the past few years.  Those of us that work within the Industry have gotten somewhat used to this fact.  For the public though, the outlook can be quite different.

      Much has been made of all the recent changes.  Because of that, it can be overlooked that many constants have survived within the Mortgage Industry as well.   And those basics … those constants that remain … are what I want to focus on here.
     Basic Mortgage Lending parameters still in place as of today are:
Loan Types
  • VA Loans for Qualified Veterans – NO Money Down
  • USDA RD Loans (Rural Locations) – NO Money Down
  • FHA Loans (Insured by Fed. Gov.) – 3.5% Down
  • Conventional Loans  –  Typically 5% Down Minimum.  (Some Buyers can qualify with only 3% Down)
Minimum Credit Score Requirements:
  • VA – 580.  Better Rates available at 640 or Higher
  • FHA – 580.  Better Rates available at 640 or Higher
  • Conventional – 620.  Better Rates available at 20 point intervals
  • USDA RD – 620 or Better
Optimum Credit Score:
  • 740 or Higher for the Best Rates Available
Credit Score Ranges:
  • 320 (Low) to 844 (High)
      In particular I want to address the following, as I hear myths and untruths thrown around regarding them fairly often …
* DISPELLING Myths & Untruths!
     Know and understand that …
  • You do NOT have to have a 20% Down Payment saved to Buy a Home
  • Mortgage Lenders do NOT make it impossible to Borrow Money
  • Borrowers do NOT have to have perfect credit to get a loan
  • If you’ve had a Foreclosure or Bankruptcy, you do NOT have to wait 7 years to get another loan
  • All Down Payment monies do NOT  have to be your own (dependent on loan program & percentage of down payment)
  • FHA IS still a viable loan option
  • Sellers CAN pay your Closing Costs (Negotiable)
  • If buying a Foreclosed Property, you do NOT have to pay Cash
  • The Sales Price IS negotiable
  • Co-Signers ARE still allowed
      Truth is, obtaining mortgage financing is still an attainable goal and process.  That said though, I urge anyone hoping to Buy Home (or hoping to Refinance their present Mortgage) to contact a lender as soon as they make the decision to pursue that action.  And the earlier in the decision-making process and pursuit of the goal, the better.
     Although facts indicate that financing success is indeed possible, it’s also a fact that the process to secure that success can be far more detailed than it was in the past. To increase yourchances of finding the success you seek during Mortgage Financing, you …
  • WILL need to find and work closely with an experienced knowledgeable Mortgage Lender
  • WILL need to listen to their advice and follow it … in a timely fashion
  • WILL have to produce more proof and financial documentation than Mortgage applicants had to years ago
  • WILL need to be educated about and involved in your Mortgage Processing in order to find success

 

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