Struggling to Get a Mortgage? Here’s Some HelpBy Nathaniel Hutchinson on June 17, 2012 with 0 Comments
The real estate market has been struggling for a while for a variety of reasons, leading to plummeting home values and a lot of empty properties. There’s growing belief that rising rental prices will lead to an upsurge in homebuying; however, numerous Americans are struggling to get a mortgage, because they cannot meet the modern demands of picky lenders. If you’re planning to apply for a home loan, be aware of the following:
Times Have Changed
Before the real estate crisis, banks gave loans to almost anyone. These days, that’s not the case. To get a mortgage in today’s market, you will need to meet some strict requirements. This means you will probably need to have a very good credit score, a solid job and enough money to put toward a hefty down payment. Most importantly, you must prove that you can afford the loan, or you will have no chance for approval.
Some Important Tips
Often, when prospective buyers approach a lender, they have no idea what they are getting into. Before you do anything, it’s important to get a free copy of your credit report to check for inaccuracies. If you find any, get them corrected. You should also use a mortgage calculator to figure out what you can actually afford. This will help ensure that you aren’t declined for applying for a loan that’s out of your reach.
Once you get involved with the loan process, don’t do anything that could hurt your chances. Don’t apply for any form of new credit; this can throw off your debt-to-income ratio and make you look bad in the eyes of lenders. Also, don’t change jobs, even if the new opportunity pays more. Banks want a long, stable history of employment and shiver at the thought of instability.
Finally, if you are struggling to get a mortgage, check out local and federal first time buyer programs. Their requirements are far more lenient than those imposed by private lenders. Many also offer second mortgages which can be used to pay for down payments and closing costs.