Our Real Estate Blog

Lending Standards Will Stay Tight

April 8th, 2008 10:01 AM by Lehel Szucs

The loan a borrower qualifies for on Monday is likely to be out of reach on Tuesday because lenders are changing the rules hourly, industry observers say.

For those who can meet the rapidly changing lending standards, the plan announced Tuesday by the Federal Reserve to loosen credit by providing $200 billion to the financial services sector should make plenty of money available at lower interest rates, says David Wyss, chief economist at Standard & Poor’s.

Last year a borrower could get complete financing on a $300,000 home with a mortgage alone or in combination with a home equity loan or line of credit. Today, that same borrower likely needs $60,000 for a down payment, plus a credit score higher than 680.

"Credit is the gateway right now," says Dan Green, a certified mortgage planning specialist and author of TheMortgageReports.com. "Weak credit is cost prohibitive."

Source: The Associated Press (03/11/2008)

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We are seeing happen to some of our buyers.  They may have qualified for a program last week but that is no longer the case.  Lenders are changing the level of risk they are willing to take frequently.  There are still loans out there and we are finding that higher credit scores are required and typically a down payment also.  FHA loans are becoming popular because they are easier to get into with a less money and the seller can contribute quite a bit. 

If you want more information just call us and we will be glad to discuss with you what we know.



Posted in:General
Posted by Lehel Szucs on April 8th, 2008 10:01 AM

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