Interest rates are low, but loans are more difficult to obtain. Here’s why.


And it is with the lenders who are picky about their customers and about their needs. JPMorgan Chase, for example, will only issue mortgages to new customers with credit scores of 700 or higher (up from 640) and down payments of 20% or more. The USAA has temporarily stopped granting jumbo loans, which are mortgages usually too large to be guaranteed by the federal government, among other products. Bank of America said it had tightened its underwriting as well, but declined to provide details.

Ms Smith and her husband, Philip Ellis, had hoped to go through a first-time home buying program in Wells Fargo that would require them to deposit 3 percent. They even took a compulsory training course. But two weeks before their $ 205,000 home closed, their loan officer said they had to cut 5% to maintain their rate.

A week later, Ms Smith said, they learned their loan was less than what they had been pre-approved for – and that they needed to find an additional $ 4,000. In the end, their down payment and closing costs went over $ 14,000, about 45% more than they had expected.

The couple, who were married in April, used the money recovered from their canceled wedding reception. Ms Smith said they were also fortunate to have the support of their families, who fed and hosted them to save every penny. But the stability of their employment was also very likely a crucial factor.

“I think our ability to get the loan was due to the fact that we were both teachers and already had an employment contract for the next year,” she said.

Wells Fargo said it did not increase its credit rating requirements, but increased down payment minimums on some government unsecured loans because it had to put most assessments on hold. interior of homes during the pandemic. Even under normal circumstances, there are a variety of situations in which borrowers may be asked to increase their down payment or get a better rate by doing so, a company spokesperson said.

Some lenders are also interested in learning more about other possible sources of cash for borrowers.

When tech executive Chris Eberle and his wife blocked off their giant mortgage on a new home in Palo Alto, Calif., Their lender, a California mortgage bank, wanted to know not only how much they had in their retirement accounts, but how easy it was to get that money.


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