SACRAMENTO, Calif. — You may have seen the advertisements for low mortgage rates, however when going through the process some have found themselves not qualified.
“A big change was the credit score,” said Diana Ramirez of Almond Tree Mortgage. “We went from being able to do 580 credit scores to the bank now requiring to do 640 or 680.”
Ramirez says lenders are also stricter when it comes to employment. If you’re self-employed, you need to have more proof of savings versus a regular employee.
“It’s stricter than a regular W-2 person because now banks for self-employed people are asking [for] 12 months of their mortgage to be saved in their bank accounts,” Ramirez said.
Cam Villa, a loan officer for Golden Bay Mortgage Group has also seen the challenges.
“It’s much harder,” Villa said. “One of the things I’ve seen is minority business owners, so people under 25 percent owners of a company, a lot of banks are not allowing them to use that income because it doesn’t seem stable at this point.”
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However in the past week loan officers have seen lenders loosening up.
If you are interested in being approved for a lower rate, make sure to check your credit.
Villa says if you need to improve your credit score you can do it and see results in a month. He recommends people keep balances under 50 percent of the total limit and make multiple payments a month before the due date.
“A lot of lenders have another secret tool what’s called a rapid rescore,” Villa said. “So, if I run your credit report and say hey I can improve your score by 20 points if you pay down these debts $500 to $1,000, what happens is that you update that balance and I submit those to the credit bureaus, they immediately review those and adjust your score accordingly.”
The process can be intimidating but people are getting approved.
Dana Fleischman who manages a local gym had to get his income verified 10 times but he got his loan during the pandemic.
“All in all we got through it,” Fleishman said. “It just takes a little longer.”
If you’re interested in getting started make sure to have a copy of your most recent mortgage statement (if you have one), your pay stubs from the last 30 days, and most recent W-2.
From there find a mortgage professional to help you through the process.
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