realestatetalks

The mortgage arena has changed.  Those changes have come under fire lately. and it remains to be seen if those changes are for the better.  

Here are some of the changes that is affecting mortgages:

• Your credit score must be 620 or higher
• You can not do any other business  like purchase a car, open a new credit card during the purchasing process or suffer consequences to your credit (not a change, but can not be stressed enough)
• You will pay a down payment of as much as ten percent
• The home you are purchasing will have a least two appraisal and may have three broker price opinion
• The purchase process may take as long as 60 to 90 days for conventional finances and 90 to 120 days for FHA/VA finances
• You may have to attend a require home buyer seminar given by HUD approved organization

The end of February beginning of March of 2009, the lenders increased the minimum credit score to 620.  Lenders increased the minimum credit score to this amount due to changes to the secondary lender market.   The lenders viewed this increase in credit score limits as a safeguard to the uncertainty of the secondary lender market.   The lenders fear that by the loan will not  purchased by the secondary market  if the lenders did not increase the credit score from 580 to 620. 

Incidentally, how lending works is that a front line lender like Chase finances your loan, then sells it to the secondary market, Fannie Mae or Freddie Mac for a portion of what the original loan is so that Chase can have cash available to make the next loan. 

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