Mortgage Delinquencies On The Decline

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The Federal Savings Bank informs readers of current US delinquency rates as reported by CoreLogic.com. The bank also suggests to recently delinquent lien holders how to responsibly purchase a home again.

The Federal Savings Bank found through the latest 'The Market Pulse' from CoreLogic published on November 20th that the serious delinquency rate of 90 day or more has declined to 5.4%. This figure represents a -36% decline from when delinquencies peaked in January 2010.

“While delinquency rates are better, there is always room for improvement,” says Nick, a banker at The Federal Savings Bank. He continues, “Back 10 years ago delinquency rates were roughly 2% of the market. We at the bank have been eying the downtrend in delinquency rates just as much as Federal Reserve has been watching unemployment.”

The Federal Savings Bank offers a few helpful tips for recently delinquent homeowners, who had their home foreclosed on a few years ago, get back into shape again for a new and responsible home purchase.

How to get a mortgage with bad credit
When it comes to getting a mortgage, most lenders look at your credit report as a means of qualification. Since the recession, lending requirements, such as extended mortgage insurance requirements for FHA loan, have tightened in an effort to make the mortgage market more sustainable and less likely to experience another crisis similar to 2008. For some Americans hoping to become homeowners, a bad credit score can have a negative impact on their ability to get approved for a home loan.

In an effort to boost the housing market and increase the number of homeowners, it is possible that some lenders will work with borrowers who have less than perfect credit. The terms of the loan may not be a good as someone with a better credit score, but it will still enable someone to buy a home. For example, someone with a lower credit score might have to pay higher interest rates, as the loan is considered riskier.

Improve your credit score
When applying for a loan, the first thing to do is to check your credit score and get a free report. Mistakes on your report can affect your score negatively. If you find mistakes, it is important to dispute them and get the record straight. Once you have your credit report, you should collect any supporting documents you could present to a lender that could help explain why it is lower. Mortgage lenders may be willing to approve a loan for someone who has shown strong borrowing practices in other areas besides their credit report, or if that person can explain poor practices.

FHA mortgages
Through the Federal Housing Administration, there are alternative loan options that don't require as high of a credit score. In addition, these home loans typically require a lower down payment of as little as 3.5 percent. Compared to private loans that may require a down payment close to 20 percent and a higher credit score, FHA mortgages might be a good option for some.

VA home loan
For eligible veterans, a VA home loan is a viable option for getting a mortgage. Home loans through Veterans Affairs don't have a credit requirement. Instead, qualification is based on length and type of duty. Mortgages are done through private lenders, but part of the loan is guaranteed by the VA.

Contact The Federal Saving Bank, a veteran owned bank, to explore affordable mortgage options.

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