by D. Babbs
One would think that qualified individuals may not have to face any difficulties when applying for mortgages. After all, they’re not the people who were able to buy a home with little or no down payment during the housing bubble. But even the good potential homebuyers are facing tough times. Not only are mortgage rates at a record low, but also were mortgage approval rates.
Last week, the mortgage rates on 30-yr fixed mortgage were slightly below 5%, causing numerous homeowners to running to refinancing their mortgages. With the spike in applications, I am curious just how many individuals will get the opportunity to capture these lower rates? On the lending side, what does this mean? According to bankrate.com, many lenders, after laying off workers in droves, don’t have the capacity to keep up with a refinancing boom.
With the housing bubble now popped, more creditworthy individuals are applying for loans but they still have to make it pass underwriters. Such underwriters are looking for way more information to determine before approving potential homeowners. This step is very justifiable given current times but it may deter people from even considering mortgages and becoming homeowners. Borrowers are now forced to fix any credit problems and/or work to improve their credit scores before taking the homeowners step in their lives.
Given the current state of our economy, everyone is being more careful when it comes to investments. I guess desperate times call for desperate measures.