Lender Credit Requirements

If you have been reading my weekly local real estate column or my daily blog, "Keep it Real in Sacramento," you know I have been complaining lenders and saying until they relax the incredibly high standards they have set, we will not see a full housing recovery.

A recent report by Moody's promises improvements this year but makes a point, lending will remain tight by historical standards.

Restrictive underwriting conditions have been one of the main obstacles in the housing recovery.  But the credit agency says that those conditions started to ease this year and likely will continue.

One of the driving elements of easing underwriting conditions is the rising home prices which give lenders more comfort in the value of their collateral.  In addition we are seeing mortgage delinquencies decline.

The Moody's report goes on to say, "Being right-side up on the mortgage improves a borrower's credit profile. It also lowers the risk of default and increases the likelihood of trade-up buying."

If lenders work as hard to make loans as the did to decline them over the past few years, combined with low interest rates and rising prices, more families will be able to qualify for a mortgage.  "Greater credit availability will help drive stronger home sales and stronger price appreciation and help keep the housing market and the larger economy on an upward path."

If you or someone you know is considering buying a home, a key element is the process is getting pre-qualified for a mortgage.  Knowing you are qualified and understanding your price range will improve your house hunting experience as well as buying the home.  If you have questions or need a referral to a good lender, give me a call at the MagnumOne Realty office in Roseville (916-899-6571) or send me an email to juliej@jalone.com