Separating fact from fiction in the mortgage-lending ‘crisis’
Mortgage lenders are finding business a little trickier these days since foreclosures began to rise and investors slowed their purchase of nonprime, mortgage-backed securities. Lenders are changing parameters weekly – if not daily. However, mortgage loans at attractive rates are still available for qualified home buyers.The days of getting a 100% mortgage loan even if you have bad credit and can’t document income are over – as they should be; those wanting to buy a home with no down payment should be prepared with documentation. The result of these changes is a cleansing of unqualified borrowers and lenders from the industry.
In the meantime, rumors about what is required to get a mortgage loan are running rampant. Below are some of those rumors and the actual facts. For the most updated information about mortgage lending or to learn about loans you would qualify for, call me or The Group Guaranteed Mortgage at any of The Group, Inc.’s seven offices.
Mortgage loan rumors versus realityRumors
• 100% financing is no longer an option
• 20% down payment is necessary to get a mortgage loan
• A credit score of 720 or higher is required to acquire a mortgage loan
• Low- or no-documentation loan programs are no longer available
Reality
• As of mid-August, 100% financing was still available
• Borrowers can get a good interest rate with a down payment as small as 5%
• Many conventional programs will give loans to borrowers with a 620 or higher credit score and government loans have no minimum credit score requirement
• Low- or no-documentation loan programs are still available with as little as 5% down