Mortgage requirements loosening up according to the Federal Reserve, but don’t get too excited (good or bad) about a return the mortgage days of yest er year when you could get a mortgage if you were breathing and had a decent credit scores.
Since 2007, mortgage requirements have tightened considerably, with lenders have a very close eye on credit reports, income and employment, assets in the bank, qualifying ratios, and the purpose of the loan.
According to the Federal Reserve’s quarterly survey of senior bank loan officers, roughly 1 in 10 lenders added mortgage qualification hurdles between April and June. It’s a huge departure from just 2 years ago when the mortgage industry was facing its first wave of challenges.
During that period, eight in 10 lenders added hurdles.
For mortgage applicants in Mesa, Gilbert and quite frankly anywhere in Arizona or the US, this quarter’s Fed survey results signals that mortgage lending may have reached its limits of restriction.
But even with the tightening of mortgage qualification requirements, lots of homeowners are still getting loans.
Verifiable income, good credit scores and equity are the “magic formula” and banks want to lend to good credit risks. And the best news for those that qualify is that mortgage rates are fantastic right now.
So, if you’re among the many wondering if now is the right time to buy a home — or refinance one — remember that, although mortgage guidelines likely won’t get worse, mortgage rates probably will.
