Boy, you got quite a few answers to these questions! It's my impression, based on your information here, that you are not going to buying in the same price range you indicate as the norm in your current neighborhood.
Yes, credit scores are a very important piece of getting a good interest rate on your mortgage, or even qualifying for a mortgage at all! Ideally, you will want to have scores over 700, and over 720 for the best interest rates.
Downpayment wise, there are some downpayment assistance programs out there, but there are income qualification requirements. There are some banks offering a 3% down program with no mortgage insurance and FHA still has their 3.5% downpayment, with the mortgage insurance premium paid on your monthly payment.
You will want to talk with a qualified lender. Cornerstone Mortgage is the lender featured on the MN Real Estate Show here in the Twin Cities. Here's a link to their website. I suggest you communicate with Ronny Loew. http://www.mnhomeloan.com/ They have a full complement of professionals (i.e. financial planners, insurance professionals, credit counselors, etc.) available to help advise you at no cost to you.
These people will be your best bet. Good luck!!!! Susan Hofflander
I spoke with my trusted mortgage broker and he gave me some current information to pass on to you. I don't know any details about about your search or price range so I will give a more than you need. I hope it helps.
If you are interested in spending a similar amounts to your current neighborhood (1.2M) then you will be looking for a Jumbo loan, which is $417,000 or more. You would need to have 15% down and a FICO score of 720 or higher. The FICO score can be lower but you then will get a higher interest rate. The current rates are at 7%-7.5%.
One of the benefits in moving to the Twin Cities is that the home prices are lower here. So, if you are looking at homes in a lower price range, you can look at a conforming or FHA loan.
The conforming rates are currently around 4.75% - 5.25% and change daily. The credit score needed is still 720 but again, if you have a lower score, you can get the loan and just get a higher interest rate. Another difference is that these loans only require 5% down.
FHA is another option. These loans can be as high as $365,000 in the Twin Cities. They require 3.5% down and 620 FICO score. The rates have been sticking around 5% - 5.5% on these loans. These have been great for my clients with lower credit scores.
I guess the bottom line is that there are options out there for buyers. It is a bit of a misconception that mortgages are hard to get right now. The right broker can find you a great product.
If you have any more questions about your search as you think about what to do, I would love to help in any way. I work exclusively with buyers in the Twin Cities and I would love to help you with your search. I know the Twin Cities very well. Let me know how I can help. My contact info is on my web page reference below. I look forward to hearing from you. Have a great day!
I used to live in San Diego, for four years, and moved back to the Midwest because there was no way we could afford a house in California, especially with the cost of living being so high there. I can understand what you are feeling right now. (and it is so good to be back in the Midwest, let me tell you!)
As for what I am seeing, a few of my last closings have involved FHA financing with both buyers having to put down a small down payment. My other closings, with conventional loans, have required at least 10% down. It really does depend on your FICO score, work history, downpayment, etc...basically the way it used to before this mortgage industry went wacko. One of my buyers was set to close this last week, when underwriting informed us that the rules had changed and they would no longer qualify with their FICO score. Now we are working on getting their score up to the new requirements.
Basically, now there are a lot of things that come in to play when getting approved for a mortgage, but yes, banks are still loaning money for people to buy homes, contrary to what the media tells you. If you do plan on moving back to the Twin Cities, and you are transferring to a new job, you will need a letter from your employer stating your employment status. Hope this helps!
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