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Mortgage Process TightensMortgage Process Tightens in 2010
(12/18/09)

Now that we are fully submerged in the worst recession in decades, some have predicted a bottoming of the housing market; and more are beginning to seriously consider a home purchase. With home prices the lowest in about 5 years, interest rates hovering near record lows, and with the government offering “free money” as an incentive to home buyers, many consider it a great time to buy.

However, what many have discovered is a lending environment that barely resembles that of just a few years ago. Lenders are no longer offering loans to anyone who could “fog a mirror.” Applicants’ credit is being checked and incomes are verified. Tax returns, W-2s, or other proof of income is required; and those who have previously participated in the underground economy now find it difficult if not impossible to qualify for a mortgage.

Additionally, those whose credit score might have allowed them to obtain financing in years past, now find a higher score required. Most lenders will require a credit score (FICO) of at least 730 in order to get the best interest rates. Banks, still suffering from past lending practices, have tightened standards.

Those in the market for a home, who may be confused by the new lending environment, should contact a lender to see if they qualify. And for those who are uncertain of their own credit standing or score can click here for FREE INFORMATION on how to obtain their credit report without obligating themselves to costly and unnecessary credit monitoring services.

With the economy and banks continuing to struggle, lending standards may be tightened even more in the coming year, and most expect a rise in mortgage rates. Those who plan to purchase a home should do so sooner rather than later.

 

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