| It may be no surprise that mortgage regulations are | | | | discharge, or any other type of bankruptcy, you'll need |
| getting tighter, but if you're in the market for a | | | | to wait 4 years before your credit can be |
| mortgage to purchase a new home, you need to | | | | re-established. |
| know what those regulations are. Educate yourself | | | | Foreclosures require even more time: 5 years have to |
| about what it takes to get approved for a mortgage | | | | elapse before you'll be considered for a new loan. |
| and find out exactly how much you can get approved | | | | If you haven't experienced either, but you have been |
| for before deciding on that dream home that might be | | | | delinquent on a mortgage for more than 60 days in the |
| out of your range. | | | | past 6 months, you'll be considered a risk and will have |
| The New Minimums and Maximums of Mortgage | | | | trouble getting approved for a new loan. |
| Regulations | | | | Risk Factors and Other Approval Guidelines |
| Getting approved for a home loan isn't just about how | | | | The new mortgage approval guidelines don't stop |
| much you can afford. There are a slew of other | | | | there. Any mortgage that's considered a high risk is |
| factors involved that affect whether or not you'll get | | | | going to have trouble getting approved. That includes |
| that mortgage, and many of those factors come with | | | | interest-only ARMS (adjustable rate mortgages), and |
| minimums on what you need and maximums on what | | | | maybe somewhat surprisingly, a mortgage for a |
| you can get. | | | | condo. Yes, you read that right. If you want a loan for |
| Your Credit Score and Income | | | | a condo as opposed to a single family detached home, |
| One of the most important numbers when it comes to | | | | you will be considered a higher risk. |
| mortgage loan approval is your credit score, and the | | | | Also, when the loan to value ratio on a mortgage is |
| minimum number for that score is now 580. If you're | | | | greater than 85%, private mortgage insurance (PMI) is |
| credit score is below that number, think about | | | | not going to lower your risk factor anymore. However, |
| improving your credit before applying for a mortgage. | | | | on a slightly different note, if you're self-employed, you'll |
| You'll also face not only higher minimums for income, | | | | actually be considered less of a risk than you would |
| but also increased maximums on your debt level. | | | | have been in the past. Another new guideline to be |
| When that debt to income ratio is rather high, chances | | | | aware of is that an authorized user on your credit |
| of getting approved for your mortgage become slim. | | | | card who has a better credit score than yours will no |
| Fannie Mae Loan Limits | | | | longer factor into your credit rating. |
| Fannie Mae has mortgage loan limits for all of its | | | | Expanded Approval Loans May Be An Option |
| conventional mortgages. The 2008 loan limits went into | | | | Maybe you no longer qualify for a conventional |
| effect on January 1, 2008, and are as follows: the | | | | mortgage, but if you come very close, then you may |
| single family residence loan limit is $417,000, the | | | | be able to qualify for an Expanded Approval loan from |
| two-family loan limit is $533,850, the three-family loan | | | | Fannie Mae. Don't get this type of loan confused with |
| limit is $645,300, and the four-family loan limit is | | | | a subprime loan; there are still strict guidelines for |
| $801,950. If you are looking for a home in Hawaii, | | | | approval. You will pay higher interest rates than a |
| Alaska, the U.S. Virgin Islands, or Guam, be aware that | | | | conventional loan, and if you have to pay PMI, those |
| the loan limits are higher and you should check with | | | | rates can be high as well. |
| your lender. | | | | Even though getting approved for a mortgage is |
| Past Bankruptcy and Foreclosure | | | | harder than it used to be just a few months ago, don't |
| If you've owned a home before, but it didn't end well, | | | | set aside your dream of owning a home. Make an |
| you need to understand what your options are for | | | | effort to understand the new guidelines and take the |
| getting a new mortgage. | | | | time to improve the areas of your application that you |
| If it's a Chapter 13 bankruptcy that mars your credit, | | | | can. It may take a little longer than you originally hoped, |
| you will need 2 years from the date of the bankruptcy | | | | but it can still lead you to mortgage approval for your |
| discharge. If it was a Chapter 13 dismissal instead of a | | | | new home. |