Banks are lending money!  Okay, there, I said it.  Have the guidelines changed?  Yes, they have, but not to the point where you can’t get a loan if you’ve got decent credit and some money to put down.  100% financing is all but gone, but since it is my business, I’ll tell you that loans are still being funded and closed.

Want to buy a new home?  Got terrible credit?  Have no money at all for a down payment?  Relatives won’t kick in to help you?  Then you’ll probably have to wait a while for the market to come back to you.  In the meantime, I would suggest saving for a down payment (if you can) and keeping your credit as clean as possible.  Remember that credit scores are based on “What have you done for me lately?”.  If you have an unpaid outstanding collection, that collecton is still considered current bad credit even if it’s years old.  Try to distance yourself (time-wise) from any late payments as well.  The further away they are, the less they matter today.

Let’s try that again.  Want to buy a new home?  Have average credit?  Have at least 3.5% down (FHA)?  Maybe even 10% down?  You can probably buy a home.  The only real question is how much home can you buy.  The bottom line is that lenders are lending to qualified borrowers and if your interested to know exactly how much you qualify for, call your favorite lender, which by now should probably be me.  Talk to you soon!

The lending business has always been a “risk-based” business, but the current guidelines for conforming and jumbo-conforming loan amounts are much more complicated today.  In order to determine your interest rate, the lender may look at as many as five different levels of down-payments (ranging from between 10% to 40% down) and as many as eight different levels of credit scores (ranging from less than 620 to above 740) before determining your interest rate.

In other words, credit scores matter more now than they ever did before, so keep your credit clean!  How do you do that?  Well, the FICO score from Fair Issac Corp. is used by one of the three major credit reporting agencies (Experian), and here’s how they score you.  Each of five types of information counts to make up your credit score – payment history (35%), amounts owed (30%), length of credit history (15%), new credit (like inquiries, 10%), and types of credit in use (10%).

Let me know if you have any questions about your credit worthiness.  Jay Friedman, senior loan consultant at jay.b.friedman@chase.com or (805) 585-2326.  Happy house hunting.