If you are on the fence about purchasing a home, now may be a good time to start seriously considering it. Mortgage lenders have been adjusting their home buying requirements for the past couple of years to easily achievable standards. While home prices are increasing, some of the changes to the guidelines could lesson some financing pressures.
Every aspect of mortgage loan requirements have seen some changes. Credit is not easier to obtain, as borrowers still need to prove they can afford their mortgage payments and qualify with rigorous standards. Low down-payment loans, easier debt-to-income ratio requirements, and a new way of calculating student loan payments are a few of the notable changes that are making it easier for entry level buyers to enter the housing market.
Lenders have started to realize young home buyers are in a transitioning point in their lives and are making some adjustments with that in mind. Monthly payments for student loan debt used to be calculated using 1% of the total outstanding student loan balance, even if this was an inflated amount. Now lenders use the monthly payments from the credit report on an income based repayment plan, which makes it significantly better for the borrower to get pre-approved.
Rising mortgage rates may be intimidating to new home buyers, but they also may benefit some borrowers due to a variety of First Time Home Buyer loan incentives that are being offered. Home buyers who have not owned a property for the past three years may also qualify for some of these First Time Home Buyer loan programs.
For more information on lender requirements and loan types, please reach out to us at # (760) 930-0569.