Banks Tighten Lending Standards

We have been reporting about the economic recovery of the nation. Things are continuing to look up as time goes on. However, the banks are being very strict and cautious about their lending practices. They are not giving out loans to just anyone anymore. Overall, the banks have been tightening their lending standards for residential mortgages for prime borrowers. These borrowers are those with very good credit history, high credit scores and a low debt-to-income ratio. This tightening happened mostly between January and March, putting a strain on the housing market.

These days, getting a loan is much more difficult than it used to be. Banks are demanding higher credit scores and larger downpayments. However, many people are taking advantage of various mortgage options such as the FHA's 3.5% downpayment program.

Despite all of this, banks are still eager to lend money to those who qualify. Now is still a good time to buy a new home or to refinance one if you are in the market for it. Give us a call at 1-888-883-5252 for more information or for assistance in getting started with your loan today!

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March Saw Increase in Home Sales

The National Association of Realtors (NAR) says that the housing market is definitely recovering. Pending home sales have increased in the month of March, putting them well above where they were a year ago. Since there is an overall national increase in sales, the inventory is slowly being lowered which helps to bring a balance to the housing market. This indicates that home prices will also be rising through 2012. In fact, first quarter sales closings were at higher levels this year than they have been in the past 5 years. According to the lastest contract signing activities, we should also see great data for the 2nd quarter.

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Lack of Job Growth leads to Lower Mortgage Rates

The recent release of the Employment Situation Report showed that the labor market only created 120,000 new jobs, a number that falls short of the expected 200,000 new jobs. Because this report was much weaker than expected, the mortgage interest rates have fallen a bit lower. Typically, whenever there is a blow to job growth, or any other negative economic news occurs, it tends to be good news for mortgage rates which will go down in response. A strong economy usually leads to higher interest rates. Right now, most lenders are seeing the best and lowest interest rates of the month. That indicates rates being lower than 4.0% in most areas, averaging around 3.75%.

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