Month: December 2012

Qualify For a Mortgage in Today’s Housing Market

Posted on Updated on

Today’s housing market may be seeing mortgage rates at an all-time low, but for buyers, qualifying for a mortgage that inexpensive often comes with a hurdles to jump through.

Photo courtesy of AKZOPhoto via Flickr.

If you’re thinking about buying a new home, or refinancing on your existing mortgage, here are three tips that can help you qualify for that low-rate loan.

Tip #1: Improve or Explain a Less-Than-Perfect Credit Score
According to a recent article published on CNN Money, the average credit score for a federally-backed loan was 760, the highest ever. A score of 720, for instance,  can affect the rate on your loan, raising it by a quarter of point. Looking into a Federal Housing Administration loan or one from a private lender may help in getting you a better rate, particularly if you’re credit score was affected by illness or job loss.

Tip #2: Look Into Government Program When Refinancing
The revised Home Affordable Refinance Program, known as HARP 2.0, helps borrowers take advantage of today’s low mortgage rates, allowing them to refinance their mortgages without any loan to value restrictions. If you owe more than your home is worth, the program may help save you money on your existing mortgage.

Tip #3: Check Finances on Condo Developments
Buying a condo can often be a more affordable option than purchasing a single-family home, But before signing on the dotted line, check the development’s finances. In order to get a federally-insured loan on a condo, the development has certain criteria it must meet, such as having 70% of their units pre-sold, with no more than 10% owned by a single entity.