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Getting a Mortgage is easier now!

Getting a mortgage is now easier

We have been involved in the mortgage industry for almost 40 years. We have been through the easy times and the hard times. And we know that financing a house, getting a mortgage, refinancing an old mortgage or any other relevant procedure has been an evolving ongoing story… Needs knowledge, experience, and basically accurate advice. Here is a related article that we think it’s helpful.

Getting a Mortgage is easier now!

Clearing the hurdles to qualify for a mortgage used to be much harder. House hunters with too much debt had their home-buying hopes dashed after being denied a mortgage. That’s changing as mortgage lenders ease lending guidelines to expand mortgage credit to more people.

Borrowers with a high debt-to-income ratio now have more leeway than since the subprime mortgage meltdown of a decade ago. Your debt-to-income ratio, or DTI, is the percentage of monthly income you pay toward your monthly debts, including a new mortgage payment. It’s a key factor — along with your credit — that lenders use to determine whether you can repay a loan. The more debt you have, the higher your DTI ratio — and that’s a red flag for lenders evaluating your potential for risk.

That’s changing as mortgage lenders ease lending guidelines to expand mortgage credit to more people.

How getting a mortgage has gotten easier

Conventional lenders charge higher interest rates on high DTI loans to mitigate their risk. They also require a higher FICO score and more cash reserves.

Raising DTI limits is just one-way lenders have made it easier to get a mortgage. LTV ratio increases help borrowers who don’t have a large down payment. However, you’ll pay private mortgage insurance when you put less than 20 percent down — and you might not be able to borrow as much as you need to buy a home.

Some conventional lenders have rolled out their own low down-payment programs without private mortgage insurance in exchange for a higher interest rate. Government-insured loans require little to no down payment, and generally, have more relaxed credit score requirements than conventional loans.

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