Good mortgage rates, and alternatives for those who do not qualify

The Wall Street Journal reported that low home prices and interest rates should be creating a great market for home buyers, but strict loan requirements are preventing buyers from receiving mortgages.

The Dodd-Frank financial services legislation requires banks and lenders to disclose credit scores being used when determining interest rates and mortgage approval.

Borrowers must have pristine credit scores such as a FICO score that ranges from 300 to 850. Before the housing crisis, a good FICO score was around 700 to 725. But Fannie Mae mortgages required a FICO score of 750 to 775 in 2011, according to The Wall Street Journal citing RBS Global Banking and Markets data. And RBS estimates that after home values and credit scores are factored in only 12 percent remain eligible.

The Detroit Free Press reported that for those unable to acquire a mortgage, land contracts provide an alternative that helps buyer and seller without involving a mortgage firm.

Bob Corbett of Century 21 told the news source that land contracts are on the rise in response to the post-financial-collapse and currently make up 10 to 15 percent of his sales. But land contracts are difficult to understand and are full of confusing details. The news sourced reported that contacting an attorney and realtor will help a buyer or seller understand how to negotiate the terms of the contract without being taken advantage of.  

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