With the housing market in turmoil after the subprime crisis and the Federal Republic of bailout of Freddie Mac and Fannie Mae, the basic requirements must obtain a mortgage, compounded. After at least one real estate financier, to get a mortgage these days you “practically walk on water.” Although this is an exaggeration, it is true that there is much more difficult to qualify for a mortgage than it was just two years now. There is no more difficult than it was before 2000, when the housing market in Hyperdrive. According to many experts in the banking sector, what we see is a return to normal.

? A said Patricia McClung, mortgage giant Freddie Mac, the creditors are back to the credit history of the basic three C of mortgages – the capacity and safety. Here’s what you need to know about each of these three requirements, and how they affect your ability to obtain a mortgage in the current market for mortgage loans.

credit history – Do you pay your bills? >
The first C in the triad mortgage, it’s history – yours. Although a history of sporadic credit, it is not impossible, to obtain a mortgage, it is more difficult – and expensive. The lenders are willing, much lower mortgage interest rates on those with higher scores credit (760-850) as it extends to those who have obtained credit under. The difference is astronomical. According to figures from June 2008, lenders offered an average of fifth 9% mortgage interest those of the proprietor of the highest credit. Those in the lowest bracket is accepting Fannie Mae (580-619) have been provided by 9th 4%. On a $ 250,000 mortgage, a difference in the monthly payment of $ 588.

To qualify for a mortgage by most major donors funds are considered, you will receive a credit score of at least 580 needed if you still find lenders willing to risk a person responding with a lower credit score, especially if they really shine in one of two C. The other problem is, of course, know exactly what a credit rating of the 580th There are many different barometers, as well as major credit reporting bureaus use different criteria for reporting. In essence, to qualify for a mortgage, you must have:

5 not missing or late payments on credit or utility accounts for at least 12 months

sixth ratio of debt income. 45 or less

seventh and the possibility of a legal contract

8 />. no outstanding defaults on credit cards or other loans

capacity – can you pay your mortgage?

In essence, the “capacity” means simply “to earn enough to ask payments on the mortgage for you to do? ” The typical rule of thumb for decision-making ability is that your mortgage payment should not exceed 28% of your gross monthly income. to pay the debt relative to income above is another way to determine the capacity. Follow these steps to keep your debt ratio: > / add all your income (before taxes) for
Add your monthly debt. Add all payments by credit card and loan payments, including student loans and car loans. Add in the amount of home, including mortgages, insurance, private mortgage insurance and property taxes.
Share your debts from your income to maintain a debt / income.

In recent years, the ratio of debt to income is acceptable, then slipped up. 65, however. 45 appears to be the new number of gold.

capacity may also include your savings. Most lenders require that you have the equivalent of six months, the savings in housing costs in order to approve your mortgage.

Collateral – What do you have? >
The final C in the algorithm of mortgages have collateral. In banking terms, security is something you own that is used to “secure” the loan will be. If you have a secured loan like a mortgage, you agree that if you do the payments as agreed, the lender take possession of the collateral and sell it to recover their loans. With a mortgage, home, buy it serves as security. If you are not scheduled payments, the bank or lender can sell the house to recover their money.

The amount of payment you will be considered part of the guaranteed value. While Zero Down mortgage loans are not uncommon in recent years, you can expect most lenders pay a deposit of at least five percent of the purchase price of the house. It is more likely demand for it, fifteen to twenty percent down on your homepage. In general, when you sit less than twenty percent on your home, you must purchase private mortgage insurance (PMI). PMI guarantees the repayment of the mortgage if you default on the mortgage market.