Is It Getting Easier To Qualify For A Home Purchase Loan?

There are some reports recently on the internet that lenders are making it more difficult for prospective home buyers to qualify for a home purchase loan. However, actually
the opposite seems to be the case with most lenders.

When the housing market crashed amidst many defaulting mortgages the whole subprime loan market tumbled and burned. Subprime mortgages had very liberal qualifying standards. Many people were qualifying for loans under subprime standards and later defaulted on their mortgage loans. As a result, after the crash lenders really tightened up on the qualifying guidelines for a mortgage loan.

The housing market has been stabilizing and home values are annually appreciating again in most areas. For a more fully stabilized housing market there is the need for the first time home buyer market to show strength. As qualified first time home buyers begin entering the market in healthy numbers, builder will begin building homes to keep up with the housing demand. First time home buyer applications have recently began increasing and it appears that housing market sales will finish out the year strong.

In an effort to increase purchase loan application approvals lenders have slowly been lightening up on their qualification factors for a home purchase loan. One example of this is with the minimum qualifying middle credit score for a traditional FHA 3.5% down purchase loan. At one time many lenders demanded a minimum score of 640 to qualify. However, recently some lenders including us have reduced the minimum qualifying middle credit score to 580. However, with 20% down it is actually possible now with some lenders including us to get approved for an FHA purchase loan with a score as low as 500 with a review of other compensating factors. Learn more about FHA Loans here on our company website.

Most states including Maryland have instituted down payment assistance programs to help more prospective first time home buyers meet the loans down payment requirement. We are a participating lender in all the down payment assistance programs.

Is it getting easier to qualify for a home purchase loan? Definitely so! Lenders seem to be doing all they can within reason to enable more people to qualify and become homeowners. For more information call: 443-943-6486 or email us