“I can’t qualify for a mortgage loan in Oregon, because I don’t have perfect credit or a 20% down payment.”
This is a common misconception among home buyers. And in many cases, these concerns are unwarranted. In fact, Oregon mortgage loan requirements have actually eased a bit over the last few years. This is true for borrower credit scores, down payments, debt ratios, and other common mortgage requirements.
In 2017, you don’t necessarily need perfect credit or a down payment of 20% to buy a house. Homeownership might be more within reach than you realize.
How Oregon Mortgage Requirements Have Eased
Fannie Mae, one of the two government-sponsored enterprises that buy home loans from lenders, recently published the results of its Mortgage Lender Sentiment Survey for the third quarter of 2017. Among other things, the survey revealed that mortgage credit requirements and standards for Oregon and the rest of the country have eased yet again.
According to a news release that accompanied the latest survey results:
“Across all loan types … the net share of lenders who reported easing credit standards over the prior three months reached a new high since the survey’s inception in March 2014, after climbing each quarter since Q4 2016.”
This is a trend we have written about before. In a previous blog post, we explained that Fannie Mae also increased its debt-to-income limits for borrowers from 45% to 50%. This means that people who carry debt from student loans, auto loans and other sources could still meet the minimum requirements for an Oregon mortgage loan.
These and other changes within the lending industry have made it easier for Oregon home buyers to qualify for mortgage loans.
Another common misconception is that borrowers in Oregon need a down payment of 20% or more to buy a house. This too is inaccurate. The truth is there are several mortgage programs available today that offer down payments as low as 3% to 3.5% of the purchase price. This applies to conventional and FHA loans alike. Military members and veterans who are eligible for a VA loan can buy a house with no money down.
And then we have the myth that home buyers in Oregon need perfect, unblemished credit to meet Oregon mortgage requirements. There is a lot of flexibility when it comes to credit scores. While it’s true that a higher score might help you qualify for a lower rate, you don’t necessarily need “excellent” credit just to qualify for a mortgage loan in Oregon. With that said, most loan programs set the bar somewhere in the upper 500s to the low 600s, as far as borrower eligibility goes.
Bottom line: The basic requirements for a mortgage loan in Oregon are more flexible than some people realize. There has been some easing across the industry over the last couple of years, with regard to borrower credit scores, debt ratios, and other qualification standards. So it’s important not to make assumptions regarding your ability to qualify for a loan.