Lender Competition Good News for Buyers

Lenders are beginning to compete for buyers while easing some of the tight restrictions that have contributed to the slow housing recovery. The spotlight on the mortgage industry over the past several years showed that as a whole, lenders had become careless in their lending practices.   

 

The number of homeowners who lost their home due to foreclosure or took a heavy hit on their credit mainly because of irresponsible lending was staggering.  To "fix" the problem, the pendulum swung far to the other side, which has made it unreasonably difficult for buyers to buy a home and for sellers to refinance at all.

 

Thankfully, a little bit of sanity along with a semblance of logic, is beginning to return and buyers and sellers should experience more positive experiences in the near future when applying for a mortgage loan. 

 

Recently, Wells Fargo announced that they are lowering the minimum credit score required on Fannie Mae loans and are now willing to consider "compensating factors" regarding negative credit.

 

We are also seeing lenders begin to vie for customers with a lower credit score and a smaller down payment.  In addition, more lenders are willing to allow borrowers to use a gift for a down payment. These are big steps in helping the industry return to normal and for the pendulum to swing more to the center.  

 

As lenders relax some of their guidelines by not just lending to those with 20% down payment and with pristine credit, more buyers will be able to enter the market and this should significantly improve the housing recovery.

 

If you have been turned away for a mortgage purchase loan or a refinance over the past year or two, it may be time to re-apply for a mortgage to see if you could qualify today.

 

Nancy Puder is a Real Estate Broker in Arroyo Grande CA with Nancy Puder &Associates. If you have questions or concerns regarding your property, contact Nancy at (805)710-2415 or email Nancy@NancyPuder.com.  You may also go to Facebook.com/Nancy Puder Realtor and "like" her page to access other real estate related articles.