Rates are CRAZY low, but can I get a loan?
Earlier today I posted the following message on my facebook profile:
FACT Some lenders actually still have mortgages available for borrowers as long as they have at least a 580 score, as long as they don't have more than 2 accounts marked more than 30 days late, and can meet other criteria.
VA and USDA Rural Development borrowers will typically need at least a 620 score to qualify.
MYTH "You HAVE to have a credit score of 730 out of 800 [credit scores actually go to 850]
FACT To get the absolute best rates at the lowest costs, a credit score over 740 is required. As the credit score drops below 740 (incrementally) the costs to borrow increase on Fannie Mae and Freddie Mac loans.
Standard FHA loans with most lenders require a minimum credit score of 640, though some lenders will lend down to 580, with increasing costs as credit scores decrease.
VA lenders will typically loan down to a 640 credit score, sometimes down to 620.
USDA minimum credit score is 620.
Jumbo Conventional loans typically require at least a 700 credit score.
MYTH "You HAVE to have 20% down, no question, the banks are being very, very tough"
FACT VA loans allow 100% financing, ZERO DOWN PAYMENT. Sellers can pay ALL closing costs.
USDA Rural Development loans allow financing up to 103% of the APPRAISED VALUE. Sellers can pay all closing costs.
FHA loans allow 96.5% financing, 3.5% down payment. Sellers can pay up to 6% of the purchase price toward closing costs and pre-paids.
Conventional Financing allows 95% financing, as long as the borrower meets the credit requirements of the Mortgage Insurance Company. The best rates are available at 80% or below.
*ALL the above assumes primary residence. Investment loans have more stringent requirements.
The bottom line: Beware what you take as fact. If you have questions ask a trusted mortgage professional. The media is paid by getting people talking, unfortunately, sometimes they don't have any idea what they are talking about!
If you own a home, call today for a mortgage review, you may be able to save a tremendous amount of money over the life of your loan.
If you are considering a home purchase, have a discussion with a mortgage professional sooner than later. If needed, there may be small things you can do to improve your credit score, saving you thousands.
To hear all the misinformation spread in that one Good Morning America interview, copy and paste the following link into your browser. My thanks to Tom Ward and Dan Flavin for sharing this with me. Please realize this is just one interview of many over the last few years where the media just plain gets it WRONG! Take everything you hear with a grain of salt salt lick! Until your particular situation is reviewed, you won't truly know your best mortgage option!
Bridget McGee Maryland Mortgage Mama NMLS# 196068 SWBC Mortgage. 410-960-2061 EHO firstname.lastname@example.org or www.marylandmortgagemama.com
If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure!
If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest. Please contact me at 410-960-2061.