The guidelines for a qualifying mortgage have loosened over the last few years resulting in an increase in mortgage applications. Borrower’s must still include full documentation proving their income and financials, but most of the criteria has been relaxed. This analysis by CoreLogic assessed that roughly 70% of purchased mortgage loans were only conventional and that more were being approved for slightly riskier borrowers.
Down payments are now down to as low as 3%. The first quarter of 2018 witnessed an uptick in down payments of less than 5% by 9%, compared to 2014’s 2%. More homeowners can purchase now with a lower down payment. The debt-to-income ratio has also increased from 45 to 50% and CoreLogic found that the share of loans rose from 5% to 20% from 2012 to 2017. The average debt-to-income ratio for purchase loans increased from 2017’s two points to almost 37% for 2018’s first quarter. While the requirement for good credit is still intact (an average score of 755), these stats are still great for anyone looking to qualify for a mortgage. With a national average approval rate of 88.2%, your odds for getting approved are looking great!
Contact one of our Stanford Mortgage Advisors and learn more about what your mortgage options are at (866) 912-3017.