When mortgage rates first dropped below 4% a few years ago many people were told they couldn’t get a mortgage loan. If they were looking to buy they were told they needed perfect credit and a huge down payment. If they were looking to refinance they were told their house value had dropped too much. They either didn’t have enough equity, or their house may have even been underwater. Because of this many people just assume they will never qualify for a mortgage. Here in Southern Maryland there are now a number of reasons why you should take the time to see what kind of mortgage interest rate you could qualify to get. Many things have changed enough that most of these people can qualify for a loan. The only way to find out is to ask. Take the time to meet with a mortgage lender to see what your options may be. Here are some things that have changed:
Lending guidelines have loosened. This means you don’t have to have perfect credit to get a mortgage. While having a 800 plus credit score will make getting a loan a lot easier there are many loans you get with a score below 600.
Low or no down payments are back. You no longer need to make a 20% down payment to get a mortgage. There are now many loans available with down payments below 5%, and some even with 0% down.
Interest rates are still low. Many mortgage loans now have interest rates below 4%. This is low enough that from a risk benefit analysis you have to think that now is the time to get a loan. Doesn’t it seem a lot more likely that some day interest rates will be back up to 7 or 8% than that they will drop to 1 or 2%?
Most homeowners have equity. With home values continuing to rise in Southern Maryland most homeowners now have equity in their house. Now that fewer homeowners are underwater on their mortgages most will find they have the equity they need to refinance.
With all these changes anyone with a mortgage who hasn’t refinanced in the last few years should take the time to find out if they qualify now. For those who don’t own a home looking at your mortgage options makes even more sense. Many people are paying rent of $1,500 a month or more. Often they could get mortgage to buy the same property for less than what they pay in rent. So take the time now to see if you can get a mortgage. We have some loan officers that we deal with who would be happy to pull your credit and see what options you have to get a mortgage. Even if your not quite ready to buy they will take the time to review your credit with you so that when you are ready to buy you will be able to get an even better loan.