Minimum Credit Requirements for Mortgages

If you are one of the many who are working diligently to restore your credit, it may have just become a bit more difficult to qualify for a mortgage. Last week Fannie Mae, the government sponsored agency that funds and purchases mortgage loans, announced to it’s lenders that it will begin requiring a higher credit score requirement for individual loans. While Fannie Mae did allow that some lower credit loans will be considered on a case-by-case basis, the new “floor” for credit is 580. In other words, if you don’t have a score above 580 don’t bother applying. While they claim they will consider files with lower credit ratings my anticipation is that individual lenders will not bother themselves with these files.

In addition, if you are recovering from a foreclosure it is also more difficult to qualify for a mortgage. Fannie Mae also reported that it will increase the minimum time requirement after foreclosure from 4 years to 5 years, meaning that if you now need to wait 5 years from the discharge date of your bankruptcy, if a foreclosure was involved, before applying for a new mortgage.

In October of last year I posted strategies for credit improvement. My four part posting was actually the test of a special report that I had written previously for members of my Inner Circle. You can find the first part of the report here: http://utahloanexpert.blogspot.com/2007/10/credit-repair-step-1.html

As always, if you would like the full report just email me at jayhart@cottonwoodmtg.com and I will send it your way. And, as always, if you would like to join my Inner Circle and receive periodic newsletters and special offers you can email me or call me at 801-256-0904.