The mortgage industry continues to change, almost daily. I wanted to dispel some common myths about mortgages in our current lending environment.
1. I have to have perfect credit to get a mortgage.
FALSE-You can qualify for a mortgage with a middle credit score a low as a 620.
2. I need to have a large down payment.
FALSE-For an FHA mortgage only 3.5% of the purchase price is required as a down payment. The down payment can even be a gift from a relative, close friend, employer, etc. In fact, you can buy a HUD Home with as little as $100 down! (A HUD home is one that HUD has foreclosed on and is trying to sell)
3. I have to be able to verify consistent income.
TRUE-The days of Stated Income, No Income, and No Ratio are gone. Income must be fully verifiable.
4. I must be employed.
FALSE-Those that are retired, on Social Security, Permanent Disability, or any other verifiable income are typically able to get mortgages as long as we can show the continuance of future income for at least three years.
5. The $8000 first time home buyer credit has expired?
TRUE and FALSE-Yes, 4/30/10 was the last day for most people to be under contract to buy a home and qualify; however, you have until 4/30/11 and still be eligible to get the credit if you were in the military, Foreign Service, and intelligence corp who served at least three months of qualified overseas duty in 2009.
7. I am currently in a Chapter 13 Bankruptcy so I cannot get a mortgage.
FALSE-You can typically get a mortgage during your Chapter 13 repayment as long as you have made at least 12 months payments on time and you have permission from the court.
8. I filed a Chapter 7 Bankruptcy three years ago so I cannot get a mortgage.
FALSE-You would be eligible for a mortgage two years after your bankruptcy has been discharged.
9. I can qualify for a mortgage if at least three years has passed since I had a foreclosure.
10. I cannot qualify on my own, but my Mother can be a co-signor.
TRUE-Your Mom can be a co-signor so long as her credit is satisfactory and her debt to income ratios are good. She would have to qualify via the same process of you.
Please let me know if you have any questions. I hope this post helps answers some myths and gives you hope for home ownership!
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