How to navigate the mortgage industry for a brighter financial future
white two-story colonial style house
You hear it almost every day. Mortgages are scarce and it’s almost impossible to get a loan. Housing prices have plummeted, and equity is nonexistent. The paperwork required to get a mortgage loan is suffocating. Is this valuable information, or has it all been overblown? I would say there are both truths and distortions in the above statements. As a mortgage lender with over 30 years of experience, the answers lie in the basis used for comparison.
Today’s underwriting guidelines are conservative compared to the lax standards that existed prior to the credit crisis that began in 2007. It was those same guidelines that caused the housing disaster and the subsequent economic turmoil. The mortgage industry has made a concerted effort to get back to common sense underwriting. Many feel they have overshot the mark in tightening credit, and things are just starting to loosen up. Strong credit borrowers have a myriad of loan options to choose from.
Things are improving
For years, the average homeowner was often disappointed by the appraised value of their home. Equity levels have now hit the highest levels since 2007. Homeowners seeking refinance loans that didn’t work out years ago, may now find they qualify.
Unfortunately, the paperwork required with a mortgage application has increased dramatically. The good news is that most of the additional compliance restrictions are there to protect the customer. Read your disclosures, and don’t be afraid to ask questions of your lender.
Take your time
There is no reason why an apprehensive borrower should miss out on the benefits of homeownership. Take your time in picking a lender and listen to the reviews that are available. Make sure you are comfortable with your mortgage professional. Buying a house, and selecting a mortgage lender, is most likely one of the largest financial decisions of your lifetime.