May 21, 2015
Mortgage lenders seem to be loosening up when it comes to making mortgages available to homebuyers. The Mortgage Bankers Association’s Mortgage Credit Availability Index has consistently increased over the last several months, which is indicative of an overall loosening of credit.
The increase in mortgage credit availability coincides with recent announcements regarding Fannie Mae and Freddie Mac’s move to back 3% down payment loans and the Federal Housing Administration’s decision to reduce mortgage insurance premiums. All of these factors have helped to ease credit.
“Mortgage credit availability increased on net in April,” says MBA Chief Mike Fratantoni. “The increase was driven by new offerings of FHA’s 203K home improvement program, new VA offerings, and new jumbo products. The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings.”
REALTORS® have highlighted tight credit conditions, significant lender overlays, and loan processing delays as the biggest obstacles facing buyers over the past few years. However, they are also reporting gradual improvements, according to the REALTORS® Confidence Index.
Real estate professionals emphasize the trend of lenders showing increased willingness to accept lower FICO scores, between 620-740. Also, more clients are securing loans while making 0% to 6% down payments. FHA’s reduction in the mortgage insurance premium and the GSE-backed 3% down payment loans are causing buyers to come to the table with less money.
While it may seem easier to get a mortgage these days, credit still continues to be far less available than it was during the housing boom era. For more information on securing a loan or to speak with a local lender, contact the REALTORS® at Hilton Head Island Real Estate Brokers. Call 843-785-8006 or fill out our contact form here.
If you want to make a little piece of The Island your own, you need more than just a road map and a REALTOR. You need a partner who can make things happen.
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