Getting a mortgage in 2011 or the upcoming 2012 year is not that difficult. I hear concerns all the time in regards to how difficult it is to get a loan in the current market. There are three changes that affect buyers currently. The changes are appraisals, down payment requirements and credit score requirements.
With the new Home Evaluation Code of Conduct (HVCC) laws, the appraisal process can be a challenge at times. This law requires all appraisers go through a centralized appraisal management company to get their orders without realtor or lender correspondence. The main issue we see with this ordeal is that these management companies send out an appraiser that is in a hurry and does not get value because he is in rush to get the next deal done. But in most cases we get value if the value is there.
The most popular loan is FHA which only requires 3.5% down payment of the sales price. 3.5% down is not that much money, if you save for it. FHA also allows you to get gift money from a blood relative for down payment. Conventional now requires 5% down payment. VA is still 100% financing and so is USDA loans. So in a nutshell there are only a few loans that are still 100% financing. The rest of the loan products out there require down payment.
Credit Score Requirements
The current market for mortgage loans is what dictates credit score requirements amongst banks. Even though FHA, VA, and some of the other government backed loans have lesser score requirement, there are always lender overlays. Currently you will find that most banks, brokers, credit unions, etc…. will require a minimum middle fico score of 640. There are banks that claim they will provide loans down to a 620, but keep in mind the underwriting requirements to get a credit score that low done typically disqualify most.
Conclusion……..getting a loan requires a minimum of a 640 middle credit score, 3.5% down and an appraisal to satisfy sales price of the home. If you think about this scenario, its really not much to ask to get a home mortgage.
If you have any questions feel free to call me…… or e-mail me. I will be glad to answer any question you have about buying a home in Texas.