Logan Utah Mortgages - What do I need to qualify for a mortgage?

Logan Utah Mortgages - What do I need to qualify for a mortgage?

if you watch television, listen to the radio, read the newspaper, or have a pulse, you've probably heard that it is much harder to qualify for a mortgage than it used to be. This is true but not because the principles of lending have changed. To qualify for a mortgage, a borrower has always needed a credit score, a job, and money in the bank. Today, They still have to have a credit score, a job, and money in the bank, but the standards are higher and the way that lenders are verifying this information has changed. For example, with respect to...

*Credit Scores: In the past, a 680 credit score was considered good enough to claim the very best interest rates. Now, 740 is the new 680. Anything less than 740 and the borrower will be paying a higher interest rate. (unless they have a lower than average loan to value)

*Employment: Some lenders use to offer "stated income loans" where the borrower's income didn't need to be verified with paystubs or W2's. With stated income loans a thing of the past, borrowers will need to provide, at a minimum, their last 2 pay stubs and their tax returns and W2's for the past 2 years. Also, borrowers need to have had steady employment for 2 years without any unexplained gaps. If they are employed part-time, they must have had the same job for 2 years before they can use that income on a job application.

*Assets: Lenders are requiring borrowers' last 2 months bank statements to verify any money that they will be using for a down payment, and/or to show reserves. Also, they require a letter of explanation for all large deposits that are not from their employer. They do this to assure that the borrower is not taking out a loan for the downpayment.

It's important to know what to expect when shopping for a mortgage. Although the standards are higher, the principles have not changed, and I believe that the majority of borrowers that qualified a year or 2 years ago, would still qualify today. With rates at historic lows, the $8,000 tax credit, and plenty of homes to choose from, it is an amazing time to purchase a home.