What has really changed is that lenders today are requiring some money down, a verifiable income, a credit score close to our national average and a reasonable ratio between your income and the amount you want to mortgage.  Imagine  that……..You’ve got to have some savings, you have to have a job and you have to be able to make the payments.

According to FAIR ISSAC, the credit score creators, the median Credit Score is 723. 

Here is what I am finding: For conventional financing, a down payment of 5% will get the job done.  A credit score of 720 or above will get you the best interest rate available.  A credit score of 700-720 will cost a only about a 1/8% bump on the interest rate.  To put this in perspective, on a mortgage of $315,000, the monthly payment difference is only $35 per month.  And still, at a 680 credit score, a mortgage with 5% down and appropriate ratios is certainly doable with a rate of 1/4% higher than the best.  NOT A BIG DEAL!

If your credit score is below 680, you are still not out of luck.  There is mortgage money out there for you with more money down or FHA has become much more flexible on credit scores willing to approve buyers with credit scores starting around 600.  FHA rates are very competitive and the down payments required as little as 3%. 

Don’t  believe everything you see, read or hear.  Bad stuff makes good selling news.

If you need help or have any questions, feel free to contact me at Dean@PrimeAnytime.com or 708-354-7355.

" That NAR suppport a permanent national conforming loan limit no less than 50 percent higher than the current conforming loan limit ($625,000 or higher).  In addition, that NAR support making the temporary loan limit increase for high cost areas as porvided in the economic stimulus legislation permanent.  Accordingly, for high cost areas, the conforming loan limit should be increased to 125 percent of the local median home sale price, not to exceed $729,750".

If passed, the greater Chicago metro area (considered a non-high cost area) which currently has a conventional loan limit of  $417,000,  would be increased to $625,000 giving relief to home buyers and sellers who are currently subject to a minimum of a1% higher (unconventional or Jumbo) interest rate for mortgage loans which can greatly pressure affordability and therefore stunts new construction and higher priced existing homes in much of suburban Chicagoland.   

This new NAR policy proposal will be presented to the Senate Banking committee on GSE reform on Thursday, March 6, 2008.  There is hope that Congress’ new willingness to raise conforming loan limits by enacting a temporary increase as part of the economic stimulus lesgislation will drive them to consider this permanent and effective modification to the the legislation.

Dean Rouso, Broker-Owner, Prime Property Partners and Committee Member of NAR Conventional Finance and Lending Committee.