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IT'S A WHOLE NEW WORLD OUT THERE!
Posted by V.K. [Mel] Melhado P.A. on Wednesday, February 25th, 2009 at 9:03pm.With the tightening of the credit markets and all the added restrictions, it can be a nightmare applying for mortgage refinancing or even for a new mortgage. Like a good scout, you had better be prepared, or you are going to to get totally frustrated and come up empty. There are some things that you will need to pay close attention to.
1. Before making application, get rid of as much debt as you possible. A poor debt-to-income ratio will kill the deal before you even get started. Make sure that your debt falls below 43% of your total gross income.
2. Your credit score will be critical. Using the 850-point FICO rating scale, a score of 750 and above will garner the best rates. As you go lower, percentages will be added to the rate. For example, if you have a score falling between 680 and 699, 0.50% will be added to the rate, so it is more important than ever to keep your FICO score in good shape.
3. Have the proper amount for a down payment available. Gone are the days of 0 downpayment. You can expect that a minimum of 10% will be required and in many cases it will be 20% to 30%.
4. If your credit is less than excellent or you are lacking the proper downpayment, then you might want to research applying for a government-insured loan through either the VA or FHA.
5. Make sure that you have that you come well organized with all the required documents such as prior years tax records, bank statements and income verification paperwork. These days lending institutions are requiring more paperwork than ever, so again be prepared.
The whole key to the process is patience, because I guarantee you that you will need it!
V.K. [Mel] Melhado PA
Downing-Frye Realty, Inc.
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