Calling all people who want to buy a home!
This just in! Banks reportedly are now lending up to 3.5 times borrower earnings! You may have a shot at your dream home after all!
Although the average credit score needed to obtain a home loan is still 700, credit availability is loosening. The LTV (loan-to-value) ratio, which tells you how much of the property is being financed, is now being loaned at 82% compared to 74% in mid-2010.
What is the LTV ratio? Let’s say you purchased a home valued at $100,000 and get a mortgage for $80,000. Your loan-to-value ration would be 80% because $80,000 is 80% of the home’s value. This means that in 2010 the banks would have only loaned you $74,000 on a $100,000 home, today they may loan you up to $82,000!
This is exciting.