Positive Real Estate Professionals

Misinformation on television, radio, the web, and in print about the state of the real estate markets in overarching and collective terms is not only a disservice to those individuals whose main source of information is one of these, but may actually hamper the economic recovery. Compounding the issue of sensational journalism is that in many instances, the person spewing the bad information is supposedly an expert. Please understand that I truly believe that we need more educated and informed consumers, especially when it comes to financial issues. I also firmly believe that individuals should get their information from very diverse sources to hopefully get a well rounded picture. The following article written by Danny Thornton originally appeared on his Mortgage and More Blog and tackles this very issue. I hope you find it both enlightening and informative.

Via Danny Thornton:

Over the weekend, I caught a story on NBC nightly news concerning obtaining a mortgage and I wanted to clarify some things that the young lady had to say. So many times people speak in generalizations today instead of breaking it down so that people can make an informed decision. Now, please understand, I am not disputing what she is stating. Actually, it is quite the opposite really. I am going to back up what she is saying, but break it down so that it will make sense to all.

The first thing that she stated is that lenders are looking for customers that have a 760 or higher credit score. While this is true for the majority of conventional lenders, it is not true of FHA and VA lenders. VA is not a credit score driven program and FHA has some limitations but can also do manual approvals given the right criteria.

The next thing that I heard her mention is the fact that whether you are buying or refinancing, the mortgage companies are looking for 20% down in the case of a purchase or at least 20% equity in the case of a refinance. This once again is the case in conventional lending. However, once again that is not the case for FHA or VA. In the case of VA there is 100% financing available for both purchases and refinances. VA will also allow 100% cash out refinancing on primary residents.

In closing, what I want people to think about before they decide that “they can not qualify” is this simple fact. Who is telling me that I can not qualify. I wrote an article back on November 1st that addressed this very fact. Rates are at an all time low today. If you wait, you can miss out on the opportunity of a life time. These rates will not sit at this low forever. With that said, if you are needing to refinance or to purchase, the time to contact a lender that you can trust is today.