The media is full of information about how great the loan rates are and how bad the housing market is. What is not covered as often is the more strenous qualification process that Fannie/Freddie have imposed. Whereas before it was quite easy to be approved for your new loan wtih credit scores down to the low 600’s, this is no longer the case. If your credit score is below 680, you will find it difficult to qualify for the low rates that are advertised.
You greatly improve your chances of qualifying for the best rate on your mortgage with the following credentials:
- Low debt to income ratio
- Credit score over 720
- If a refinance, at least 20% equity in your home and if a purchase a 20% down payment
- Job Stability – whether you are an employee or own your own business, the length of time is now an important factor
