An article in Tuesday’s San Francisco Chronicle details the six biggest hurdles that buyers face when trying to secure a mortgage.
This news shouldn’t surprise anyone, but it’s a reminder that the real-estate market is still moving forward into recovery in fits and starts, not leaps and bounds.
Anyone who has gone through the mortgage process in the past year and a half or so knows how hard it is. For those who haven’t been through the process but might be buying soon, these six items will be good to keep in mind.
The whole article is linked below, but here are the six items:
1. High Credit Scores: Buyers need higher credit scores than they used to, thanks to wary banks that are still hesitant to make risky loans. Having a lower score might not stop you from getting a loan, but it could cost you more in fees.
2. Assets and Income: Look for lenders and banks to be much more diligent about verifying the money you make.
3. Changing Requirements: It’s hard to say why, but financing guidelines keep changing. It’s likely a product of the still-unstable market, and it’s probably frustrating for most buyers.
4. Low Appraisals: Blame the glut of short sales and foreclosures for this.
5. The Crackdown on No-Documentation Loans: This is meant to prevent fraud, but small-business owners and self-employed folks are finding it harder to prove their income to banks, which leads to rejections of loans that should probably be granted.
6. Condo Building Requirements: It’s harder to approve condo loans, because the building must be approved as well. That can be especially tough for FHA buyers.
This is tough news for buyers, especially since this may be a good time to find deals on both mortgages and homes. That is, if the mortgage can be approved.
[Source: San Francisco Chronicle]