Questionable Times

We are seeing a lot of questionable qualifiers, and by questionable, I mean borrowers that don’t fit into the 750 FICO score range, or even face employment uncertainty as the pandemic continues on.  We are hearing that it may be 2022 before many jobs come back that were lost this year.  Wow.

In the mortgage business, the average FICO score is over 700 and has been since the crash of 2008.  It’s easier to get borrowers into a decent interest rate loan when their FICO score and employment certainty are solid, which isn’t always possible today.

It’s important to understand you may still qualify for a loan, if your credit score isn’t north of 700, you’ll have fewer options, including having to commit to paying mortgage insurance for the life of the loan.   Perhaps the most important qualifier is the ability to repay your loan.  Of course, proving continuing employment is a big requirement these days.  W-2 employees with verification of continuing employment, for example, will have a better chance of getting a home loan during these times.  And lenders are checking employment status throughout the escrow process right up until closing.

But what do you do if you have less than stellar credit and you are self-employed?  How do you take advantage of these great rates?  How do you get into a house?  There are mortgage products designed for you, talk with your mortgage broker to see if they have a product that will get you qualified.

In the meantime, do what you can to get your FICO score a bit higher, if you are in forbearance, be sure to get three consecutive payments paid on time, and be open with your broker to get the right loan for your needs.

Be Safe.