Do You Think Qualifying for a Mortgage Getting Easier?

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Real Estate Agent with Allison James Elite CA. BRE 01501699

Chris B Johnson, REALTOR®, SFR®         More On Moorpark Real Estate

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Is Qualifying for a Mortgage Getting Easier? | Simplifying The Market

Is Qualifying for a Mortgage Getting Easier?

There has been a lot of talk about how difficult it is to get a home mortgage in today’s lending environment. However, three recent reports have revealed that lending standards are beginning to ease. This is great news for both first time buyers and current homeowners looking to move or buy a second vacation/retirement home. Let’s look at the three reports:

The MBA’s Mortgage Credit Availability Index

This index, issued by the Mortgage Bankers’ Association, measures the availability of credit available in the home mortgage market. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. We can see that the index has been increasing nicely this year:

Mortgage Credit Availability Index | Simplifying The Market

Fannie Mae’s latest Mortgage Lender Sentiment Survey

This survey revealed that more lenders report that mortgage lending standards across all loan types are easing. The survey asked senior mortgage executives whether their company’s credit standards have eased, tightened, or remained essentially unchanged during the prior three months. The gap between lenders reporting easing as opposed to tightening over the prior three months jumped to approximately 20%. This represented a new survey high of "net easing." In addition, the share of lenders who expect their organizations to ease credit standards over the next three months also ticked up this quarter.

Doug Duncan, senior vice president and chief economist at Fannie Mae, addressed this easing of standards:

"For the first time in seven quarters, we see a pronounced increase in the share of lenders, particularly medium- and larger-sized lenders, reporting on net an easing of credit standards … This is a significant result in light of public discourse on credit availability and standards … Overall, we expect that lenders' tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion."

Ellie Mae’s latest Origination Insights Report

The easing of credit standards is also confirmed in this report which showed that the average FICO score on a closed loan fell to its lowest point in well over a year. Here is a chart of average FICO scores on closed loans so far in 2015:

Ellie Mae Credit Scores | Simplifying The Market

Just keep an eye on interest rates…

Although this is all great news, there was one challenge in the recently released data. Ellie Maereported that the average interest rate on closed loans is beginning to inch upward:

Ellie Mae Interest Rates | Simplifying The Market

What this means to you…

If you are a first-time buyer or a current homeowner thinking of moving up to a bigger home or buying a vacation home, now may be the time to act. Mortgage lending standards are beginning to ease and interest rates are beginning to inch up.


Chris B
Johnson
Realtor
CDPE, SFR, BPOR, HAFA, CDAT, PSC, QSC
Allison James Elite
Moorpark, CA
(805) 208-0823
Your home is probably the biggest asset that you own. That is why you need to choose a partner, who is working for YOU to get the job done correctly, the first time. One who is concerned about Quality, not Quantity.
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Rainer
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Chip Morgan
Long Realty - Dove Mountain, Marana AZ - Tucson, AZ
LSS, LSE, LMS

This is something that I have been seeing quite a bit lately... I think it depends on who is doing the lending.  I have found the private direct lenders are getting QUITE a bit more aggressive.  I had a buyer talking to one of my lenders recently to see how long they would need to wait after a short sale to purchase a new home.  The lender said... I can make it happen the day after a short sale if your credit is still good otherwise.  The rate might not be pretty but I will get you into a new home.

The things that certain banks and lenders are doing is blowing my mind.

Sep 23, 2015 01:56 AM #1
Rainmaker
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Chris B Johnson REALTOR®
Allison James Elite - Moorpark, CA
5 Star Rated REALTOR® Quality, Not Quantity

That is encouraging Chip Morgan , and welcome to AR!

Sep 23, 2015 02:06 AM #2
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Rainmaker
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Chris B Johnson REALTOR®

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