Things are looking better for home buyers and re financiers in terms of underwriting requirements and credit scores. FHA loan applications will accept a credit scores as low as 600. Buyers can have a lower credit score, but if they have a solid income, sufficient savings, and a large enough down payment then the banks will consider their loan application. This would help some people who experienced economic hardship in the past that harmed their credit score, but are now eligible candidates.
Down payments are lower. the Federal Housing Administration just reduced the high upfront mortgage insurance premiums which will allow a wider array of home buyers to qualify. The FHA insures loans with down payments as low as 3.5% since late January. Moreover, Conventional loans may only require as little as 3% down.
Wells Fargo has also loosened it’s policy on gifts from relatives and friends to help with the closing costs. Before a purchaser needed 5% down from their own resources. Now it’s only 3% down, and the remaining can be a gift.
If your thinking about buying a home, it’s a perfect time to talk to lenders and mortgage brokers. These changes may be enough to buy a house.
Distributed by Washington Post