Friday, January 02, 2009

Lenders are Still Lending

People think the mortgage industry is no longer lending money to borrowers. The days of 0% down are gone. There are plenty of people buying and qualifying for mortgages as little down as 3.5%. Here is some information on todays mortgages.

Now’s the time to get a great deal on a mortgage, but borrowers should shop around.

Rates are changing constantly and they differ widely among lenders. Borrowers typically need a FICO score of at least 720 for the best interest rates, although for a fee Fannie Mae and Freddie Mac will guarantee loans with FICO scores as low as the mid-600s. Having enough cash for a 20 percent down payment is also important. But borrowers can get loans with lower downpayment requirements. FHA, for instance, makes loans available for a minimum 3.5 percent down.

For a conforming loan, monthly mortgage payments can’t exceed 28 percent of gross income, while all debt payments, including student loans, can’t exceed 36 percent of gross income.