What Credit Score Is Needed For Low Mortgage Rates

admin — Thu, 13 May 2010 15:11:52 +0000

Whenever a home owner refinances their mortgage they always want the best mortgage rates they can possibly qualify for. Although low mortgage rates are advertised all over the place qualifying for them is a little more involved then simply just applying and getting the loan. So if you are wondering what credit score is needed for low mortgage rates read on and discover how your interest rate is determined.

The main misconception is that mortgages are only based on credit score. This is partly true and recently many lenders are requiring credit scores of 680 or higher to get the best rates. Even many wholesale FHA lenders now want a 580 credit score for borrowers. But even if you have good credit you will still need to meet some basic criteria to get the lowest mortgage rates possible.

When you apply for a mortgage your mortgage broker or loan officer will collect data from you such as recent pay stubs, bank and financial account statements and last 2 years tax returns. They will also order a property appraisal for your home to determine a market value. With this information your loan scenario can be run through an automated underwriting system. This system will look at many variables and issue a loan approval or denial based on these variables. So what exactly does the automated system look for?

Debt To Income Ratios: This is a mathematical calculation and is your total debt divided by your gross income. To qualify for low mortgage rates your DTI should be at or below 41%. Only accounts that are revolving count towards your debt to income ratio so do not count phone bills or other utility bills.

Loan To Value: In order to get the best rates your loan to value should be at 80% or less of the appraised value. As an example if your home was worth $100,000 then you should borrow no more then $80,000. As your loan to value increases so will your interest rate.

Amount of Reserves: Your reserves are basically cash you can access in an emergency. So figure in accounts like IRA’S, 401K’s checking savings and any other account you can liquidate quickly. As long as you have enough in reserve to cover 3-6 months expenses you should be fine

Mortgage Payment History: Having timely mortgage payments with no 30 day late payments is critical to getting approved for low interest rates. Even with one 30 day late you will not be approved.

Although there are more variable these are the ones that carry the most weight when the automated system is determining your eligibility for conforming loan approval.

By: Darin Sewell

Bad Credit Second Mortgage Loan: A Good Answer to all Your Financial Demands

admin — Sat, 28 Nov 2009 16:57:30 +0000

Bad credit second mortgage loan is like exchanging your first mortgage for a new mortgage. But, the question may arise in your mind why you should go for remortgage while continuing your first mortgage? The basic and primary reason is to save money i.e., getting mortgage at low rate of interest. Bad credit second mortgage loan can be used for many purposes like home improvements, debt consolidation, children’s education, holidays, etc.

For persons having bad credit record, bad credit second mortgage [http://www.bad-credit-mortgage-choice.co.uk/Bad-credit-second-mortgage-loan.html]could be the best option. Though bad credit pose a great problem in getting loan approval and people face a lot of problems and hassles. Lenders have specially designed bad credit second mortgage to avoid hassles for persons with such problems.

Owning a home does not solve all your problems. Your needs and desires will always knock your door. You have to fulfil all your needs and desires to be happy in life. In such a situation, second mortgage i.e., refinancing is a good option. If you have a bad credit then bad credit second mortgage is always with you to satisfy all your needs and wants.

As bad credit second mortgage is secured against your property, you will get competitive interest rate on the lower side for your second mortgage.

Apply for bad credit second mortgage and fulfil all your needs and wants. Get rid of financial crunch and feel happy.

By: Amanda Pane

Mortgage second » Loan Approval

What Credit Score Is Needed For Low Mortgage Rates

Bad Credit Second Mortgage Loan: A Good Answer to all Your Financial Demands