The volume of mortgage applications submitted to lenders is at an eight-year low, the AP reports. This news comes a day after the U.S. Commerce Department reported that construction of new homes hit a 17-year low in July. While this news makes investors and economists wince, if you’re in the market for your first home, it’s music to your ears.
Stagnating real estate prices mean bargains abound for home shoppers, and the dearth of people applying for mortgages means embattled banks will fight tooth and nail to underwrite a well-qualified borrower. Of course, that’s just the problem. These days, fewer people will qualify for a mortgage than ever before.
If you want to take advantage of the soft times in real estate—and the $7,500 first-time home buyer tax credit—and mortgage lending to score a deal on your first home, you’ll probably need the following:
- Good to spotless credit (FICO of 700 or more)
- A job for at least two years (longer is better)
- Less than 20% debt-to-income ratio
- A down payment of at least 10%, preferably 20%
If you meet those criteria, why are you still reading this? Go out and buy a home! For the rest of us—we’ll just have to keep plugging away at our financial stats and wait for the mortgage market to recover from its recent injuries.