If you’ve been putting off buying a home because you thought getting approved wouldbe too hard, know this: qualifying for a mortgage is starting to get a bit more achievable, but lending standardss are still strong.
Lenders are makingit slightly easier for well-qualified buyers to access financing, which is opening more doors for people ready to make a move.
So, if strict requirements were holding you back, this shift could be the opportunity you’ve been waiting for, without repeating the risky lending practives that led to the housing crash back in 2008.
Lenders Are Opening More Doors
Banks are offering credit to more people in an effort to boost activity in the housing market, including buyers who have lower credit scores or smaller down payments. And that means more people are getting approved for mortgages.
But it doesn’t mean we’re heading for another crash like 2008. Even with the slight easing lately, lending standards today are still much tighter than they were back then.
According to the Mortgage Bankers Association, the Mortgage Credit Availability index has been going up. This index shows how easy or hard it is for people to get a mortgage.
When the index rises, it means banks are easing their lending standards. And in May credit availability hit it’s highest point in almost three years.
Why does this matter to you? It means you may now be able to quality for a mortgage that you wouldn’t have just a few months ago.
But What About 2008?
Now, you might be thinking, “Didn’t loower lending standards play arole in the 2008 housing crash? That’s a smart question – and an important one. But here’s the difference. While credit availability is rising, lending standardss are still under control.
Based on MCAI dat going all the way back to 2004, today’s lending levels are still way below what they were leading up to the housing bubble.
So, increasing mortgage credit availability right now isn’t a concern. It’s just a good thing for anyone looking to buy a home.