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So you are new in the market of home financing! You don’t know how much home financing is problematic today. According to a survey, only three out of ten loan applications are approved in a day. In the case of heyday loans, five or six loan applications out of ten is the current normal ratio, while it was nine out of 10 in the past. This is because of the strictness of underwriting standards these days. It means the home borrowers should have more secure and higher income, higher credit score and the list is endless of challenges of home financing. However, those challenges are nothing in front of these six hurdles of home financing by which a home buyer may end up to quit their hope of buying a dream home. 1.Top-notch credit scores required: Seeking for a home loan? Higher credit score is required to get approval for home financing. Although home loans can be approved at the score lower than 620, the higher interest rate and fees can frustrate you with the procedures. Since lenders and financial institutions have raised the credit score bar, getting credit for buying home has become a biggest issue. In the year 2006, it was possible to get finance with the minimum credit score of 680 but today around 740 is a must. 2.Higher inspection of assets and monthly income: In the past, the banks were soft-hearted for scrutiny of income and private assets. But now the things have changed completely. Today, homebuyers should prove themselves capable to repay their debts and the mortgage lenders fully verify and check out the assets and deposits of borrowers. Even if the buyer proves the capability to repay debts against property, the property issues and appraisal issues often turn down the qualified buyers. 3.Ever-changing requirements of home borrowers: In order to approve the mortgage, many borrowers fail to fulfill their requirements. Around a couple of years before, it was possible to finance a loan with having a decent credit score. Today, about 700 credit score, total debt ratio should be under 36% and stable and secured employment is required. Unfortunately, a home buyer ends up with ever changing requirements and guidelines of lenders. Today, home financing is like a moving target which can be accomplished by those who have higher credit scores and who is capable to pay large amount of down payments. 4.Lower home appraisals: Today, houses are not valuating with the actual contract price due to large number of short sales, slow sales and bank-owned sales. This problem of Home Valuation Code of Conduct has been changed into the unforeseen barrier in the recovery of real estate market because it controls the appraisal industry. The main reason behind the problem of HVCC is those inexperienced appraisers who are not familiar with the current market, which results in unnecessary rejection of mortgage applications and incorrect appraisals. 5.Shrinking of opportunities for self-employed professionals and small business owners: A new legislation has been introduced by the Congress which identifies “liar loans” against the law. As the name suggests, liar loan is a type of loan which is approved with fewer or no document. In the past, some borrowers who are not qualified for long-term loans use these loans as mortgage. For self-employed professionals and for non-US honest citizens, these loans are said to be very helpful tool. This is said to be the smart way to show income to the lenders for those who don’t get paycheck. With reinvesting profits in the business, the owners of the business can avoid payroll tax payments by paying minimum amount for themselves. Now the banks don’t allow exceptions something like this and turn down the loans that have been approved previously. 6.Condo loans become toughest: Apart from the buyer, the condominium also needs approval from the bank so that condo loans become tougher loans nowadays. The owner occupancy rates, cash reserves, low delinquency rates based on monthly valuations are documented. It can be tough to handle in many markets. What’s more, the approval method of condo loan has been amended by the Federal Housing Administration. It also inhibits home buyers who can qualify FHA loans. What is the solution? When it comes to buy a home, first of all make sure that you have enough budget to buy a particular house you have shortlisted from the real estate listing. If the budget don’t allows you, then check out your credit score. Always try to keep your credit score upper than 760 in order to get best deals on home financing. All lenders select the borrowers on the basis of their credit scores. They detect the capabilities of borrowers in loan repayments by their credit scores. The greater the credit score, the greater would be the possibilities of getting loans easily and with better interest rates. If you have bad or worst credit score, you may face problems we have discussed before. So, make your decisions wisely because this might be your biggest investment. On the other hand, you may consult the experienced and reputable real estate agents Durham.for a helpful and simple financial advice. Hiring a real estate agent is always a good solution because they are the professionals who help the borrowers in every step. Before hiring an estate agent, make sure he is capable to help you in home financing and buying procedures from the beginning to the end. In Conclusion In order to find the competent and professional real estate agents, do extensive research by asking your friends or family or by using online resources. The top-notch buyer’s agents properly help the clients in every step of the procedures of home searching and buying. Finding someone you can trust and you feel comfortable with is the key thing to get success in the real estate market. So, this is necessary to put yourself in the situation when all these things become easy. Buying home is tricky but not impossible if you do it with patience. Visit markten-pow.ca to find reliable real estate agents Durham.for your house hunting.
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