O’ Where O’ Where did the home loans go?

March 05, 2009

The topic on the street these days seems to be the difficulty in obtaining new home loans.  It used to be so easy — all you had to do was find the home of your dreams, apply for a loan and move in!  Well, things aren’t so easy any more…the rules have changed considerably!  It always appears that the lending industry goes from one extreme to the other — either loans are extremely easy to get or they are practically impossible (or so it would seem!).

Here are a few things that you need to know in these rigorous economic times if you are looking to buy a new home:

Fico Scores:  These must be above average (600+) and when your credit report is run there must be no bankruptcies. Click here to visit

Down Payments:  In the olden days (two years ago)  you could buy a home with 100% financing.  Those days are gone…lenders now require at least 10% and most likely 20% down.

Income:  You will most likely need two years worth of pay stubs for verification and THEN they will calculate your debt to income ratio.  It’s probably a good idea to have your debt paid down pretty well.

Proof of Funds:  Most lenders are now requiring a few months worth of bank statements to show that your money is available for closing costs and down payments.

Reserve Funds:  Again, most lenders are now requiring that you have a reserve on hand to cover two to six months worth of payments.

These are just some of the areas that you need to be aware of.  Usually only very qualified people can meet the above criteria but that is what the lenders want in these times of uncertainty.  A prospective buyer knows he should prepare early and have everything ready to go prior to starting the home buying process.

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