MORTGAGE CREDIT AVAILABILITY TIGHTENS UP


As Mortgage Rates fell to the lowest since 2013 this month, the Mortgage Brokers Association (MBA) indicated mortgage credit availability fell 0.2 percent making is slightly more difficult to qualify for a home purchase mortgage.

The Mortgage Brokers analyzes data from the nation’s lenders which showed many lenders are making potential home buyers jump through more hoops and show a more stable financial picture before they will allow a family to qualify to buy a home. Their reasoning is the lenders don’t want to experience another housing recession caused by allowing lower down payments of 3.5 percent and allowing families to get loans without being able to make the payments.

Fannie Mae has allowed lower down payments for FHA loans of 3.5 percent but they also want families to be able to their monthly house payment for the entire length of the loan term.

“On net mortgage credit availability tightened very slightly in March. Administrative changes drove declines in the availability of conventional and super conforming loan programs, and those were partially offset by slightly relaxed lending standards on government lending programs which includes FHA and VA loans,” said Lynn Fisher, MBA’s Vice President of Research and Economics.

Fannie Mae’s first quarter 2016 Mortgage Lender Sentiment Survey conducted in February confirmed MBA’s data, reporting that fewer mortgage lenders are indicating that they are loosening credit standards, and many do not expect credit to become more accessible over the next few months.

The share of mortgage lenders reporting easing credit standards over the prior three months fell for the second straight quarter, according to the report. In addition, the survey also found that the share of lenders that expect credit standards to ease over the next three months decreased from last quarter for all mortgage types.

Fannie Mae reported that 13 percent of lenders surveyed noted that credit standards eased over the last three months in the first quarter of 2016, down from 17 percent in the previous quarter. Over the next three months, 13 percent of lenders said credit standards will ease, down from 18 percent last quarter. Five percent of lenders said that credit tightened over the last three months, up from 4 percent last quarter. Only 7 percent of lenders said credit will tighten over the next three months, the same as last quarter.

If you live in Visalia, Tulare, Porterville or the Reedley area please call your favorite lender and get up to date information what you will have to do to qualify for a loan to buy the house of your dreams or refinance the home you are living in today.
 

Jeremy Engle
Country Club Mortgage 
559.734.5000 Central Valley Phone 
805.544.2775 Central Coast Phone Email: jeremy@jeremyengle.com 
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