It’s no secret that the foreclosure crisis has done some strange things to the American mortgage industry. Despite mortgage interest rates as low as they’ve been in ages, fewer new mortgages are being approved. Some explain this discrepancy by citing persistent unemployment, depleted savings accounts, and (understandably) shaky consumer confidence. While all that stuff rings true, increasingly stringent mortgage qualification requirements also shoulder part of the burden.
Unless you have impeccable credit and a stellar income history – no easy feat these days – getting a mortgage approved is going to be a challenge. But it’s definitely possible – you just need to pull out all the stops and follow a few smart-and-simple principles.
Recently, Movoto conducted a survey of our recommended agents regarding buying conditions. Basically, we asked them what they’re seeing on the ground as far as mortgages, short sales, inventory turnover, etc. When it came to the topic of mortgage loan approval, here’s what they said:
- 70% said that a buyer “can easily get a loan” with good credit, a good income, and just 5% down.
- However, only 36% said that a buyer with medium credit, a good income, and 20% down (!) could “easily get a loan”.
- 62% said that this same buyer (medium credit, good income, 20%) could “get a loan, but only with select lenders.”
So that’s some compelling evidence for the influence of your credit score – even an extra 15% up-front isn’t going to make up for credit that’s just “okay”.
Stay tuned for tomorrow’s post on what you can do to boost your chances of qualifying for that dream house.
