Lending Restrictions Loosen3/2/2012
Lending Restrictions Loosen
For those of you who have recently purchased a home you are likely familiar with the lending constraints that home buyers face today. The process can seem downright invasive! The current regulations are, in my opinion, a government overreaction to the seemingly non-existent lending guidelines from the last housing boom, built on risky credit and under collateralized loans.
Finally, the over zealous years of tightening lender requirements things are starting to stabilize.
The avg. credit score required for a mortgage has stabilized at 700. This is higher than prior to the crash but has stopped constricting. Also, banks are now lending up to 3.5 up from 3.2 times the borrowers earnings. Finally the loan-to-value ratio (the amount of a mortgage as a percentage of the total appraised value of the property) was as low as 74% LTV in the mid-2010s, is now at 82% LTV.
What does all this mean...buying a home is getting a little easier!
Its a great time to buy!