But increasingly, the recent vagaries of the job market are also causing this issue, as people who have changed their line of work or have changed from salaried employee to freelancer over the last couple of years can also have their home loan applications rejected based on income.

2. Muddled money matters. If the mortgage for which you’re applying plus your monthly payments on credit card, car and student loan debts will comprise more than 45 percent of your total income, you could have problems qualifying for a home loan. You might also run into problems if you rely too heavily on bonuses, overtime, cash wages or rental income — all of these can be difficult or impossible to get a mortgage bank to consider, and if they do, they might not take all of it into account.

3. Credit issues. Today, the mortgage-qualifying FICO score cutoff falls somewhere between 620 and 660, depending on which lender and which loan type you seek. More than one-third of Americans, by some numbers, have credit scores too low to qualify for a home loan. Even if your credit score is high enough to qualify, if you have any late mortgage payments, a short sale, a foreclosure or a bankruptcy in the last two years, loan qualifying could be difficult to impossible.

4. Property didn’t appraise. Since the whole industry had its hand (among other things) smacked for allowing home values to skyrocket in a very short time, appraisal guidelines have tightened up — some would say, even more than overall mortgage guidelines. So, it is increasingly common to have the property appraise for a price lower than the sale price negotiated between the buyer and seller.

This is especially common in the refinance realm, as well over a quarter of U.S. homes are now upside-down, meaning the mortgage balance owed is greater than the value of the home. (If you’re trying to refinance an upside-down mortgage, consider the FHA Short Refi program — contact your lender or get referrals to any mortgage broker who makes FHA details to apply.)

5. Condition problems. With all the distressed properties on the market, and with most nondistressed sellers barely breaking even, more home-sale transactions than ever are falling apart due to condition problems with the property. Many lenders will not extend financing on homes where the appraiser points out problems like cracked or broken windows, missing kitchen appliances, electrical problems, or wood rot.

And in the world of condos and other units that belong to a homeowners association, if more than 25 percent of units are rented (rather than owner-occupied) or more than 15 percent are delinquent on their HOA dues, new applications for refinance or purchase mortgages on units in the development are likely to be rejected.

6. Technical difficulties with application. The days when lenders just took your word for it are long, long gone. Applications with incomplete or unverifiable information are doomed.

If any of these mortgage loan application glitches arise in your homebuying or refinancing process, it’s critical that you connect with your mortgage professional, be it your banker or mortgage broker, to determine what course of action to take.

via Lowe’s Inside Out Home Improvement Tips | Produced by Inman News.

5-year Treasury-indexed hybrid adjustable-rate mortgage ARM averaged 3.02 percent this week, with an average 0.6 point, unchanged from last week when it averaged 3.02 percent. A year ago, the 5-year ARM averaged 3.52 percent.

1-year Treasury-indexed ARM averaged 2.83 percent this week with an average 0.6 point, up from last week when it averaged 2.82 percent. At this time last year, the 1-year ARM averaged 3.48 percent.

Fixed mortgage rates fell to all-time record lows this week following the Federal Reserve’s announcement of its Maturity Extension Program and additional purchases of mortgage-backed securities. Interest rates for ARMs, however, were nearly unchanged as the Federal Reserve plans to sell $400 billion in short-term Treasury securities, which serve as benchmarks for many ARMs.”Meanwhile, the spring and summer home-buying season gave a boost to a number of house price indexes. The Federal Housing Finance Agency reported that its National index not seasonally adjusted rose for the fourth consecutive month in July. Similarly, the S&P/Case-Shiller 20-City composite index, which has a broader scope of properties, rose 0.9 percent between June and July with 17 of the cities experiencing positive monthly growth. Finally, CoreLogic reported that its index, excluding distressed sales, increased at a 1.7 percent monthly rate for the same month.”

via Cornerstone Real Estate ‘s Real Estate Update.

Wow. Awesome time to buy Utah Real Estate.

Turmoil in financial markets has investors fleeing to the relative safety of bonds and mortgage-backed securities, pushing down mortgage rates to at or near historic lows. Rates on 30-year fixed-rate mortgages averaged 4.39 percent with an average 0.8 point for the week ending Aug. 4, down from 4.55 percent last week and 4.49 percent a year ago, according to Freddie Mac’s latest Primary Mortgage Market Survey.

The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, before climbing to a 2011 high of 5.05 percent in February. Rates on 15-year fixed-rate mortgages averaged 3.54 percent with an average 0.7 point, down from 3.66 percent last week and a 2011 high of 4.29 percent in February. That’s a new all-time low rate on 15-year fixed-rate loans in records dating to 1991.

via Mortgage rates fall on doubts about economy | Inman News.

The slow housing market represents bad news for people who own real estate, but great news for first time buyers, or people looking to upgrade their current homes. Home prices keep dropping, and apparently so do mortgage interest rate.

With no fanfare or public announcements, two of the largest FHA-approved lenders have backed off their controversial “overlay” requirements on FICO scores lender overlays are qualification requirements that can be more stringent than FHA’s own requirements. Both Wells Fargo and Quicken Loans confirmed to me last week that they will now lend to applicants with 580 FICOs and 3.5 percent down payments. Their revised standards conform in most respects to FHA’s own minimums, and open the agency’s financing to large numbers of buyers whose credit scores have sagged during the recession. Wells Fargo is the largest originator of FHA-insured mortgages; Quicken ranks third, according to industry data. See related article:Keeping score in FICO-fair lending controversy Along with most other major lenders, both companies previously had insisted on minimum FICOs of 620 for otherwise qualified borrowers seeking 3.5 percent down payment loans. If your score came in even slightly lower, they wouldn’t even look at your application.

via FICOs and FHA: 2 big lenders loosen up | Inman News.

Federal Reserve Chair Ben Bernanke hinted Monday that the Fed is likely to buy more government debt, a move that could further drive down rates on mortgages, corporate financing, and other loans.

“I do think the additional purchases, although we don’t have the precise numbers for how big the effects are, I do think they have the ability to ease financial conditions,” Bernanke said at a meeting with college students after his presentation at the Rhode Island Public Expenditure Council.

Source: Reuters News (10/4/2010)

via REALTOR® Magazine-Daily News-Fed Chair: Government May Buy More Debt.

Even today, private capital has not yet fully returned to this market,” Jeffrey Goldstein, the Treasury Department’s undersecretary for domestic finance, wrote recently. “Fannie Mae, Freddie Mac and other government entities guarantee more than 90% of newly originated mortgages. They are practically the only game in town.” (In 2005, they accounted for just a third of the market.)

via Feds rethink policies that encourage home ownership – USATODAY.com.

A lot of the time lenders will give you one quote when you initially express interest in getting a loan. They hope that you won’t shop around, that you won’t compare their rate with other banks so they can make a bigger commission. But, if you do shop around, and they find out you are going to choose a different lender, then they will cut their fees and give you a better rate.

According to Lending Tree, mortgage lenders have more wiggle room to deal with when it comes to things like being able to sacrifice some potential commissions in order to compete.

According to Cameron Findlay, LendingTree’s chief economist, the difference between the rates lenders are giving consumers and what they are paying investors is much higher than it was back when the recession started, meaning that even while rates seem low, lenders have bigger margins and, therefore, have plenty of wiggle room to offer you an even better rate.

As of Monday, according to Mr. Findlay, the average mortgage rate nationally was 4.63 percent for a 30-year fixed-rate mortgage, 90 basis points higher than the 3.73 percent that investors in the loans are paid — what’s known as the coupon rate. If you account for guarantee fees, this means lenders could theoretically offer rates as low as around 4 percent, Mr. Findlay said. While the exact spread moves around quite a bit from week to week, it’s currently up from a few weeks ago. Before the summer of 2007, it was traditionally zero. Since then, decreased competition among banks has caused it to increase.

via Why Mortgage Rates Vary So Much – Bucks Blog – NYTimes.com.

Other interesting findings include:

* Over two-thirds (69%) of adults who are homeowners have a mortgage that they need to pay off.

* People whose homes are believed to be worth less than the money owed on their mortgages are common across all income groups. Fully 26% of adults with mortgages who have household incomes of $75,000 or more believe their homes are worth less than the balance of their mortgages.

* Almost a third (29%) of adults with mortgages are having some difficulty (18%) or a great deal of difficulty (11%) paying off their mortgages.

Among those who believe their homes are worth less than their outstanding mortgages, fully 26% are having a great deal of difficulty and another 23% are having some difficulty paying them off. These homeowners are likely candidates for future foreclosures.

* The two-thirds (65%) of all adults who are concerned about having enough income to cover all their costs and expenses include 26% who are very concerned and 39% who are somewhat concerned.

* Among those who believe that their homes are worth less than their mortgages, fully 42% are very concerned and another 38% are somewhat concerned about not having enough income to cover their costs.

* Unsurprisingly, income levels make a big difference. Concerns about not having enough income to cover costs and expenses is much higher among people with household incomes below $35,000 (40% are very concerned) than among those with incomes over $75,000 (16% are very concerned).

via Twenty-Seven Million People with Mortgages Believe They Owe More than Their Homes Are Worth.

It’s almost scary to think about the implications of this. Government spending is out of control, and the burden to pay back the debt will be placed on future taxpayers, yet, the taxpayers are struggling just to pay their own bills. As a nation we have just become to reliant on debt.