New programs and updated regulations are changing the mortgage game Following the 2008 financial crisis, mortgage lending ground to a halt for all but the most perfect of borrowers, and largely stayed that way until recently. Two years ago, lenders began to ease mortgage standards, and today, it?s easier for most homebuyers to get a mortgage than it has been in years.
Updated guidelines from mortgage investment giants Freddie Mac and Fannie Mae relaxed credit score requirements and streamlined the application process, while also creating new programs to help first-time buyers and those with low-to-moderate incomes.
But this doesn?t mean we?ve returned to the lax lending days of the early aughts. Any borrower will need to prove her ability to repay the loan, and provide documentation detailing her debt-to-income ratio. Still, homeownership doesn?t have to be an impossible dream when you understand what?s required to get approved. Here, experts outline the basic standards for getting a mortgage.
Credit score limits
The credit score limit for loans backed by Fannie Mae and Freddie Mac is 620, but many lenders like to see a score of at least 640 for conventional loans. Ginger Wilcox, chief industry officer at Sindeo, says that the best situation for a borrower is to have a 780-plus credit score.
Kevin W. Hardin, senior loan officer at HomeStreet Bank, says, ?If you have a credit score over 720, you are going to have very few questions and very few problems.?
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