Mortgage Money is Still Available, But it is Harder to Get
These days, you should not take anything for granted when it comes to being approved for a mortgage, says Guy Cecala, publisher of the industry newsletter Inside Mortgage Finance.
According to Cecala, even borrowers who think they're well-positioned to be OK’d for a mortgage "can't assume anything." And they should be ready to shop around for the best deal.
If you are looking for the absolutely best interest rate on a conforming loan, Cecala says you’ll need a 20-percent down payment and a FICO credit score of 750 or higher – requirements that few people meet.
Those who can’t put 20 percent down will probably have to purchase mortgage insurance, for which there is another set of requirements that must be met. Insurers are being very cautious with regard to what they will insure, according to some experts.
"There's money to be had,” says Cecala. “You just have to jump through hoops to get it."
He estimates that about one third of the people who were able to get a loan in 2005 and 2006 no longer qualify for financing today. That takes into account the disappearance of subprime and Alt-A loans, and tougher requirements for getting prime mortgages.
Don’t get the idea that getting improved for a mortgage these days is impossible. The National Association of Realtors, for example, recently issued a report that indicated getting a mortgage might not be as hard as consumers believe - and might even be getting easier.
A June survey of more than 2,000 NAR members hinted that home buyers are indeed finding ways to obtain financing. When asked why their most recent prospective buyer postponed a home-buying decision, 6 percent said it was because of mortgage difficulties. On the other hand, 23 percent said the prospective buyer didn't buy because of waiting for prices to drop further.
– By Ed Coury, senior editor and Midwest bureau chief for the Wall Street Journal Radio Network, Dow Jones & Co., and a reporter for WWJ Newsradio 950.
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