It's no secret that the financing of a home is a bit more challenging than it was back in 2007. After all, relaxed and often unregulated lending practices got us all into the market crash of later 2007 and 2008, and yes, even Vermont Real Estate suffered some of the consequences. So how does the new lending landscape affect you, the future home or condo buyer in Vermont, and what can you expect to provide for the successful approval of your loan? Here are a few details: - The first thing you'll notice is that the typical maximum amount you'll be able to get a loan for is roughly 80% of your future home's value. In 2007 it was not unheard of to hear of loans for 100% of a home's value. Now, if you are a first time home buyer, there ARE programs that will allow you to qualify for very LITTLE money down, and in some cases ZERO cash down. This is not the norm, however, for the typical home buying public. -You should plan on having FICO credit rating score between 680 and 720. If you are thinking of buying a Vermont Home or condo in the next few months, it is a great idea to check your credit score, and see how you can improve it. You'd be surprised how quickly you can increase your credit score by 100 points or more in a few short months. -The amount of income you can spend on your home, and related home expenses is usually around 38%. If you're above this amount, you may not qualify for the loan you are looking for. For history's sake, this amount in 2007 was closer to 45%. -You'll need to verify your employment 10 days prior to closing. If you're thinking of making a career change, do it AFTER you close on your home. For that matter DO NOT buy any major purchases prior to your home closing! In 2007, you only had to verify your employment 45 days prior to closing. In closings that we've managed this year for our clients, we've seen that well qualified buyers are getting their loans, with very little frustration. As long as you are aware of the above mentioned guidelines, your loan should go through the process smoothly, and you'll be enjoying that new home or condo in no time! For more questions on financing your next home, or just questions on what to do next, contact Brad Dousevicz at 802-238-9367. Happy to help!
Some Simple "Need to Know" Financing Facts, and what requirements have changed in recent years.
- By Brad Dousevicz