To ease your concerns about the current mortgage industry, rest assured there is money available to borrow; the mortgage lenders are merely adjusting their processes in an effort to adhere to stricter guidelines. The following four areas of mortgage lending are changing to some degree:

1.)  Documentation is more important and required. This includes tax returns, clarifications of large bank deposits, income received in the past 30 days, etc.

2.)  Pricing of loans includes interest rates and loan origination costs. The most significant factor in how much or little you pay for your loan is dependent on your credit score. Those people with credit scores below 740 will have to pay higher interest rates and points. Now is the time to pay attention to your credit history and find out where you stand with your credit score.

3.)  Loan-to-value ratios--There are no more 0% down conventional loans. Conventional loans require a minimum of 5%, FHA requires a minimum of 3% and 2nd home/investment purchases require a minimum of 20% down. You can still obtain a VA loan with 0% down but please consult your mortgage professional for the necessary requirements.

4.)  Property types--loans for condos and manufactured homes are becoming more challenging.  The required down payment % is higher in order to secure decent rates. With condos specifically the % of owner occupied residents must be at a certain level for certain loan qualifications. Many lenders are requiring a minimum of 75% owner occupancy rates in condo complexes.

So with these tightening guidelines there is challenge, but please remember there is money available to borrow.  The first step is to find a local lender with the knowledge and expertise. We are happy to recommend some reputable lenders in La Plata County who can ease you through the loan process. Please contact us direct at (800) 955-0259 x 1036.