Getting a home loan in Denver is not any more difficult than it was a few years ago. Clients ask me all the time “Isn’t it really hard to to a mortgage nowadays? I don’t a big down payment and my credit isn’t perfect.” The good news is that Denver mortgage interest rates are still low and qualifying is easier than most people think.
Fact is that the real estate recession of 2007-2010 did change many lending regulations. And, in some cases, down-payments increased dramatically. Plus, anyone with a foreclosure or a bankruptcy in the last sever years was out of luck. All that has changed. It’s about as easy no getting a home loan in Denver as it was before “the crash”. In some cases, regulations are actually looser than they had been.
Getting a Home Loan in Denver Credit Requirements
Credit score requirements for a home loan in Denver are about the same as they were 10 years ago. National lenders like Fannie Mae and Freddie Mac generally require a minimum score of 640. That’s for a conventional loan less than $493,350 with as little as 3% down-payment for first time home-buyers. Some local lenders use similar guidelines for all 3% down-payment loans.
FHA loans and VA loans generally require a 640 credit score. That’s a far cry from perfect 800 FICO score credit. FHA requires a 3.5% down-payment. and, the VA loans do not require any down-payment for balances below $493,300. Any VA loan with a higher loan balance requires 25% of the difference above $494,350.
Bankruptcy, Foreclosure Short Sale
Waiting period following traumatic credit events like foreclosure, bankruptcy or giving a deed back to the lender (short sale) waiting times are actually much shorter now than they have been. Those waiting periods were most often 7 years. Many lenders are loosened their requirements now.
FHA ,VA, and USDA Rural loans now require much shorter waiting periods from1-3 years as shown in the chart. Sometimes, jumbo loans require longer waiting periods. That varies from investor to investor.
More Liberal Debt To Income Ratios
Debt to income ratios are calculated to determine a borrowers qualification for a specific loan once the exact amount of the mortgage payment is known. It is the total amount of all debts and monthly obligations as a fraction of total gross income. So, car payments, minimum credit card payments and other loans are counted in that ration. But, daily living expenses such as groceries and gasoline are not.
Those ratios have actually increased the last few years. That makes qualifying easier for borrowers and home buyers.
Disputing Bad Credit To Get A Denver Home Loan
Most of the lenders we work with will help home buyers dispute bad credit. So, if a creditor has misreported an item, they will guide you though the appeal process. They also will council home home buyers about how to improve credit scores. In more severe cases, they might recommend a professional credit repair agency. But, in most cases, the process is simple and easy for a individual to be about to accomplish.
So, if you are worried about qualifying for a loan, don’t worry. Instead, talk to your preferred lender or Realtor about options that might be available for your particular circumstances. Most always, there is a lender who handle those individual circumstances.
Do you have questions about getting a home loan in Denver? Just ask us on the form below and we get you a quick, accurate answer confidently by return email.