Is It Getting Any Easier To Qualify For Mortgage Loans

Is It Getting Any Easier To Qualify For Mortgage Loans

Is It Getting Any Easier to​ Qualify For Mortgage Loans?
Anyone who has been around in​ the​ last two to​ three years understands exactly what the​ market is​ going through .​
If you​ are a​ first time home buyer and you​ have had trouble getting mortgage loans to​ purchase that house,​ then you​ feel the​ pain of​ many others who are in​ the​ same boat .​
The real estate market is​ in​ a​ down time,​ as​ lenders just aren’t nearly as​ willing to​ give out mortgage loans as​ they used to​ .​
In the​ past,​ practically any person with a​ form of​ identification could go up to​ a​ bank and get a​ mortgage loan .​
That has changed,​ though .​
Now,​ lenders are being more careful with whom they lend and it​ doesn’t look like this is​ changing anytime soon .​
Because lenders were busy handing out loans to​ people who shouldn’t have had them,​ there became a​ huge problem .​
The borrowers,​ who became known as​ sub prime home buyers,​ quickly became a​ larger risk than the​ bank had anticipated .​
Their past credit problems reared their ugly head and bit the​ banks squarely in​ the​ rear end .​
After a​ while,​ those mortgage loans which the​ bank was so excited to​ hand out had quickly turned into a​ foreclosure for people with less than stellar credit .​
They didn’t have the​ money,​ desire,​ or​ capability to​ make any of​ the​ payments on​ their brand new house .​
That left the​ lenders with only one choice .​
They had to​ tighten up their standards for mortgage loans .​
Making that decision was prudent and smart by the​ lenders,​ as​ they had to​ begin to​ protect themselves from huge losses .​
The problem is​ that they have tightened up their regulations a​ bit too much .​
Now,​ instead of​ locking out those people who would be considered risky,​ they are locking out everyone with a​ minor blemish on​ the​ credit report .​
In reality,​ banks have no choice,​ though .​
When foreclosure occurs,​ they take a​ big loss .​
After a​ while,​ those losses really add up .​
The question that many mortgage loans seekers want to​ know is​ whether or​ not this is​ going to​ stop any time soon? Are people going to​ be able to​ get a​ loan when they search for a​ new home? More importantly for some folks,​ are interest rates going to​ drop to​ a​ level where it​ makes sense to​ refinance or​ take out mortgage loans? This is​ important information for not only home buyers,​ but also home sellers,​ who are in​ a​ bind because of​ the​ lack of​ eligible buyers .​
Though there is​ no clear answer in​ sight,​ there are some indications that a​ little bit of​ change may be coming .​
Last week,​ the​ Federal Reserve Board announced that it​ would be cutting Federal interest rates by a​ half of​ a​ point .​
Though this does not have a​ direct impact on​ mortgage loans,​ it​ is​ a​ pretty good indicator of​ which way the​ market might head .​
By making that decision the​ government is​ deciding that they need lenders to​ hop off of​ the​ high horse .​
They are interested in​ making it​ easier for banks to​ secure funding,​ so that they might pass that along to​ consumers .​
Though the​ idea behind this move makes plenty of​ sense,​ there are some indications that lenders might not be so quick to​ follow .​
Having already been burned once by subprime lenders who had no business getting loans,​ banks have made widespread policy changes in​ regards to​ who is​ allowed to​ borrow money .​
Even with these changes,​ they won’t be giving out mortgage loans to​ just anyone with a​ pen and piece of​ paper .​
On the​ contrary,​ their rigid standards are likely to​ stay in​ place for the​ next couple of​ years,​ regardless of​ what direction the​ market takes .​
If lenders are smart,​ they will never repeat their actions of​ giving loans to​ the​ unworthy .​
Those actions played a​ major role in​ putting the​ market where it​ is​ today .​
For those looking for relief from high interest rates,​ some help might be on​ the​ way,​ though .​
Since earlier this summer,​ mortgage loans have already seen an​ interest rate decrease .​
Though it​ has not been radical,​ the​ small change may be an​ indication that lenders are loosening up a​ little bit .​
That is​ going to​ be absolutely critical if​ the​ real estate market is​ to​ pick itself up off of​ the​ floor and return to​ prominence like it​ was on​ a​ few short years ago .​
The best advice for home buyers and mortgage loans seekers is​ to​ keep your credit rating high and your history clear .​
This way,​ you​ won’t have any trouble qualifying,​ no matter what moves the​ market makes .​
You can’t depend upon lenders to​ make a​ choice when they are so clearly in​ a​ bind.

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