- Dan Boyett
Dan Boyett with Dover Mortgage is one of Charlotte’s leading mortgage brokers. This Ballantyne buzzer has requested Dan to keep us in the “know” of what’s happening with home mortgage loans. Check out his first post!
I keep hearing its getting harder to get a mortgage.
I guess that depends on how old you are or how good your memory is. When I bought my first home, there were three options, you either had 20% to put down, VA if you were a veteran or used FHA to guarantee your loan with 3.5% down. Realtors and sellers hated FHA as they had very strict standards for the home and required every window to have a screen, there could be no peeling paint, and all repairs were to be made or NO LOAN. One was embarrassed to admit they had no savings for a down payment. For the actual loan process, I had to prove that I deserved a loan. This took verification of stable employment and income, sound credit history, savings to prove I did not live month to month and somebody had to know my daddy, (well almost). The interest rate was in the mid teens for a thirty year fixed. Check out interest rates since 1980! Many had to get ARMs just to qualify. A borrowers debt to income ratio had to be within 35%. The process took 60 to 90 days for approval. And the entire time, I was a nervous wreck, wondering what would be drug up from my high school permanent file that would cause my loan to be denied. PLAYED HOOKY DENIED. And when I finally got approved, I HAD ARRIVED! I was a homeowner. We jumped through the hoops and the economy grew through home ownership.
Somewhere along the way, investors found mortgages as a great way to make a buck, and wanted everyone to buy a house. The times were good and there was no fear. The down payment started dropping and one day banks said Hey, we will lend you the 20% down and finance 100%. As a lender, I would hear how more and more loans could be done with lower credit scores, lack of savings, and even BANK RUPTCY. OH MY, how could this be? Well it was and off we went to provide a loan for anyone with a pulse. No income OK, poor credit OK, just sign here please.. Buying a house was easier than buying a car. Everybody had one, everybody felt they deserved one. Suddenly First time homebuyers wanted granite countertops, stainless steel appliances and Jacuzzi baths. What happened to starting off small and growing? We were all house crazy, yes even me.
Fast forward to now. We are all still licking our wounds. Fortunes have been lost, jobs lost, homes lost. Much of the wealth Americans were building is no longer. The price we have paid as a society will take generations to repay. But to get back to the original question, is it harder now to get a loan. Well lets see. A homebuyer needs to be able to verify stable employment and income, show a history of paying their bills, and have a little savings to demonstrate the ability to plan for a future. I believe that is a reasonable request of someone borrowing 30 years worth of payments. Its still not back where it was 30 years ago, there are 95% loans, FHA has relaxed its guidelines, there is Down Payment assistance AND the rates are in the fours instead of the teens. So what are you waiting for? Call your favorite realtor and go buy a house. Jump through a few hoops. Our economy will grow again, through home ownership, with lessons learned.
Check out this article regarding home ownership!
Blog insights provided by C. Dan Boyett. Dover Mortgage. For more information or to contact Dan, go to www.cdanboyett.com .
