For some buyers, it will be more difficult to qualify for a loan for their new home. Why? Well, the mortgage market and the housing market have both changed a lot over the last couple of years. These changes have caused the rules for qualifying for a low-interest mortgage much more difficult.
In the past, many homeowners were passing on the fixed-rate mortgage and utilizing an adjustable rate mortgage. Bankrate says that for some homeowners, those not planning to stay in their home longer than 5 years, an adjustable rate mortgage was usually a good fit. For those that did plan on staying in their home for more than 5 years, a fixed rate mortgage was usually the right choice. With the changing economy and more difficult standards, however, things are changing.
Two of the new rules for mortgage qualification include:
- FICO scores must now be at least 740 in order to get the best rates, fees, and points.
- Homeowners using an FHA loan may now only spend 31% of their gross monthly income on their house payment, including principal, insurance, interest, taxes, and association fees.
Want a few tips to help improve your chances? First, check your FICO score regularly. If your score is lower than optimum, you can begin making changes to raise the score. If your score is already high, then you know you are doing the right things.
Second, don't focus simply on interest rates when trying to get a loan. Remember that you have the option to pay discount points or change the type of loan.
Third, always compare several different loan options to determine what the differences in cost really are. You can compare a loan with a higher interest rate with no points to a loan that is a lower rate but requires points to be paid. You can also compare your options with different companies.
Finally, if you refinance your house after 5 years, don't get another 30 year loan. Get your loan amortized for the remaining period of your old loan.
To read the article from the
Tulsa World, "Buyers Forced to Jump Through Hoops",
visit this link.
To
buy or sell your Tulsa, OK property, contact Kelly Howard of McGraw Realtors at 918-230-6341 or
www.kellyhowardhomes.com.
