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Posted on October 4, 2008 by Frank Collins | Posted under Mortgages
From Strict to Less Strict Guidelines
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As most of us know firsthand, banks have made lending guidelines tougher which makes it more difficult for individuals to qualify for loans. However, financial experts claim that once the bailout plan is completed, it should pave the way to an easier loan process. Most loan companies say they are still quite busy but the number of approvals has declined due to the lenders' guidelines. Most feel the bail out will be beneficial for everybody. Although experts state that lending will resemble what it was 10 to 15 years ago. No more of those exotic home loans, a term Alan Greenspan used for No Job or Asset verification loans, the 1 percent pick a payment loan with deferred interest. These were never around 10 to 15 years ago. Washington Mutual who carried many of those just recently went under due to major losses from those badly performing loans. Everyone tends to agree the plan is necessary and will help to stabilize the financial sector wit more money flow along with stringent guidelines. No more business as usual from three years ago. The improvement will not be overnight. However, most financial experts feel the housing market and the economy will show improvement in six months. So, as the money flow increases guidelines may become slightly les stringent but don't expect any 90 to 100 percent limited documentation loans for a long time. Some helpful tips on how to improve your credit score, which helps your home loan approval chances are: - Pay all of your bills including credit cards on time. - Never charge greater than 35% of your maximum limit on your credit card. (If your max limit is $2,000, do not go over $700.) - When you're considering getting a home loan, know your total bills and income. You should spend 38% of your gross income for house payments and your debt. - Have explanation letters for any large deposits - Have copies of your W2's for last two years - Have copies of signed tax returns for last two years - If self-employed, have an up to date Profit and Loss statement - Have copies of your bank statements for one year These items will help you expedite the loan approval process. About The Author: Frank Collins is an avid investor in real estate and contributor to Jumbo Home Mortgage and a website to Find Low Mortgage Rates and trusted lenders in your area. |
Tags: MORTGAGE, JUMBO MORTGAGE, FHA MORTGAGE LOAN, REFINANCE JUMBO, REFINANCE MORTGAGE LOAN, VETERAN, HOME EQUITY LINE, REFINANCING, REFINANCE
