Qualifying For Mortgage Today On Home Purchase With Bad Credit
This BLOG On Qualifying For Mortgage Today On Home Purchase With Bad Credit Was UPDATED And PUBLISHED On February 12th, 2020
How difficult is it for Qualifying For Mortgage Today?
- Why do many homebuyers ask this question on how difficult is it in qualifying for mortgage today?
- The main reason is that an average 3 bedroom to 4 bedroom home with 2 bathroom averages a price tag of $250,000
- However, home prices vary from city to city, county to county, and state to state
- California has one of the highest home prices in the nation followed by New York, New Jersey
- Home prices in Michigan, Georgia, New Jersey, California, Colorado, Mississippi, Kentucky, Indiana, Florida, Texas, Georgia, Illinois, Ohio, Virginia, Kansas, and Alabama are increasing double-digit every year for the past years
- There does not seem to be any signs of a slowdown
- Many are concerned about home values increasing too so fast that they fear another real estate market crash
- There are still many Americans who have not quite recovered from the 2008 Great Recession
- Many are very leery and careful in buying a new home
In this article, we will discuss and cover qualifying for a mortgage today for homebuyers.
Qualifying For Mortgage Today Versus Prior To Real Estate Crash Of 2008
Qualifying For Mortgage Today is not as difficult as many Americans think it is.
- However, to qualify for a government mortgage loan or Fannie/Freddie Conventional Loan, you do need income
- There are Non-QM Loans which are mortgage loans that are out-of-the-box and do not need to conform to agency guidelines but rates and terms are not favorable
- You do not have to pay off outstanding collection accounts and charge off accounts to qualify for an FHA Loan unless the particular mortgage lender you go to has FHA Lender Overlays
- Qualifying For Mortgage Today is difficult for self-employed borrowers who have many write-offs
- It is easier for a wage earner on W-2 income and who has decent credit and has been timely on their monthly payments for the past 12 months
- If you want to be pre-qualified and get pre-approved, contact Gustan Cho Associates at 262-716-8151 or text for faster response
- Or email Gustan Cho Associates at firstname.lastname@example.org
The Team at Gustan Cho Associates are available 7 days a week, evenings, weekends, and holidays.
The Great Recession Of 2008 And Qualifying For Mortgage Today
The 2008 Credit Meltdown was the worst economic disaster in the history of the United States since the Great Depression:
- The aftermath of the Great Recession did affect Qualifying For Mortgage Today
- Real estate values have never seen such a drop in such a short period of time where it affected every city, county, and every state in the nation
- Most Americans believed that real estate was the safest investment to park their money
- A home is most people’s biggest investment
- Many seniors count on their home as part of their investment portfolio
- Many homeowners counted on the equity they had in their homes as part of their retirement
The Real Estate Crash of 2008 plummeted home values leaving homeowners with home loan balances that exceed the value of their properties.
Qualifying For A Home Loan With Rising Home Prices
Americans who saw their home equity as a financial Safe Haven and left the workforce and depended on it hoping to sell their homes someday went back to the workforce.
- Homes that were once purchased for $500,000 were valued at $200,000
- The whole real estate market came to an abrupt standstill overnight and remained dormant for years to come
- Millions of homeowners could no longer afford their mortgage payments due to being stuck on teaser adjustable mortgage rate loans
- With teaser rates, initial mortgage payments were negative amortized
- Then when the teaser payment period was over, the new adjusted payment skyrocketed sometimes tripling the monthly payments
- Home foreclosures, short sales, deed in lieu of foreclosures, and bankruptcies were never as high as it was during this period of time
Many real estate, credit, and mortgage industry professionals viewed the 2008 Real Estate and Mortgage Meltdown not just as the Great Recession but another Great Depression.
Mortgage After Real Estate Crash Of 2008
The entire real estate, finance, and lending industry underwent a complete overhaul after the Real Estate Crash of 2008.
- The Sub-Prime mortgage market went completely obsolete
- Many of us remember mortgage lending giants Washington Mutual and Countrywide Loans
- Those two along with hundreds of other sub-prime mortgage companies went out of business overnight
- The after effect caused hundreds of thousands of loan officers specializing in that sector to lose their jobs
The NMLS and Dodd-Frank SAFE ACT was created and launched.
Creation Of New Mortgage Regulations
The Consumer Financial Protection Bureau, CFPB, was created:
- This agency did not waste anytime in enforcing mortgage rules and regulations
- The newly created CFPB did not mess around with violators with its stern fines and penalties
- Even the largest of mortgage banking firms feared them
- Qualifying for a mortgage today after the real estate crash of 2008 became tougher than ever before
- The mortgage industry became so complex
- Even licensed loan originators did not know everything
- Just because borrowers qualified for a FHA Loan, VA Loan, USDA, Loan, or Conventional Loan did not mean they qualified with every lender
Every lender had its own overlays. This holds true even though FHA may say yes, the individual lender may say no and not approve the loan due to their own overlays. Gustan Cho Associates has no overlays on government and conforming loans.