REAL ESTATE
Port Townsend, WA

View ALL listings
of real estate for sale in Port Townsend and Jefferson County.

Getting A Mortgage

What does it take to get pre-approved for a mortgage loan in the 2010 (post-recession) economy?

It varies from one lender to the next and also from one borrower to the next. There are many variables at play. But there are certain things you need to have going for you, regardless of which lender you choose. Here are some things you should strive for in 2010, if you want to get approved for a mortgage with a decent interest rate:

• Credit scores. If you want to get pre-approved for a loan (just to get your foot in the door), you'll probably need a FICO score of 650 or above. Not written in stone. Just an average. If you want to qualify for the best rates, you'll probably need a 760 or above.
• Down payment. The size will vary based on the type of the loan and other factors. FHA loans require 3.5% down, and traditional loans require anywhere from 5% - 20% down. This won't be needed for pre-qualification or pre-approval, but it will be for the final approval. The lender will check your bank statement to make sure you can afford it.
• Your debt-to-income ratio. This ratio compares how much money you pay toward your debts each month, relative to your overall income. If you're buried in debt, you probably won't get pre-approved for a home loan.
• Your income. Lenders have different guidelines in this area too, so the minimum requirements will vary.

There is a huge difference between mortgage approval and affordability. It's possible to get approved for a loan that's too big for you. It happens all the time, and it's a leading cause of foreclosure. Just because you get pre-approved for a certain amount doesn't necessarily mean you can afford that amount. So you should determine your home-buying budget before you start talking to lenders.

Have a question about real estate?

Let me help you. All my years of experience as a Realtor have given me a wealth of knowledge about selling and buying real estate. If I don't already have the answer to your question, I know just where to go to get it. Simply use this handy form.