New Mortgage Rates: Most people don't qualify for loan

Even though the US mortgage rates dropped last week and homeowners are being in-undated with mortgage brokers calling them up, many of them still find themselves not qualifying for mortgage loans.

Millions of homeowner does not qualify for re-financing as they are in negative equity which means they owe more than their home is worth, and with the tighter controls on lending, certain loans like adjustable-rate balloon mortgages are hard to obtain.

If you wanted a 30 year mortgage loan at a rate of 5.5 percent for a loan of $400,000, you would need 10 percent deposit or down payment, a debt to income ratio of 45 percent or less, a credit score of 680 or more to qualify for a conventional mortgage.

However, Brian Bonnet, President of Signature Mortgage Services in Alexandria said that if a buyer that had solid credit history could get a Federal Housing Administration-insured loan at a rate of 5.5 percent fixed rate for a $625,000 loan, with a loan this size you would be required to make a down payment as low as 3.5 percent.

Source: Washingtontimes

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