RICHMOND, Va. (WWBT) - Mortgage lenders tightened their standards in 2020 making it harder for some buyers to get financing, especially a conventional mortgage.
If you’re hoping to get a conventional mortgage and take advantage of these low, low-interest rates, your application is going to have to stand out.
Liz Renter with Nerdwallet says one way to make that happen is to keep your debt levels low.
“So, lenders like to see a debt to income ratio of about 30 percent or lower. So what that means is the amount of money you’re sending out to your debt payments should be about 30 percent or less of your monthly income,” said Renter.
Liz Renter also says you’re going to want to keep your credit score high. In 2020 conventional borrowers had an average FICO score of 750.
Do everything you can to get the credit score up and keep it up until the sale is final.
And finally, do what you can to save up a nice down payment.
20 percent down payments are not a requirement. There are still low down payment programs available.
However to qualify for the best mortgage rate from these conventional loans you are going to want to aim for that 20 percent down payment.
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