Friday, October 30, 2009
Getting a Mortgage In This Day and Age
By Jameel Murray
Getting a mortgage can be extremely difficult these days. Mortgage lenders are paying an increased amount of attention to several factors. One of these factors includes a borrower’s credit score. Lenders are requiring that a borrower have a credit score no lower than a 660. This can be one of the determining factors in one’s mortgage payment. In the past, borrowers with a high debt-to-income ratio such as 55 percent were able to receive a considerable amount of loans. After the housing crisis, the maximum percentage of debt ratio is around 40 percent. Another determinant of the amount of loans a borrower may actually receive is the borrower’s actual income. In the past, borrowers were known to exaggerate their earnings but now lenders are requiring borrowers to provide verification of income through a series of paper work. A borrower’s liquidity also determines the amount of loan coverage one may actually receive. Banks are requiring borrowers to have an adequate amount of money available to cover payments.
Even though these requirements may scare some borrowers away from buying a home, there are several options borrowers are presented with. One option may include the idea that borrowers may need to put down a more sizeable down payment on a home. This ensures a lender’s trust in your request for a loan. Borrowers also need to have their finances set before going in for a loan. If finances were erratic, lenders would be discouraged to lend off money. One last option a borrower may have is to purchase a house where the value is going to increase. Banks may deny borrowers loans based on the speculation that a home’s value may decrease.