If it feels like mortgage approvals are harder to come by than in years past, that’s because it is.

And we’re not just talking about sub-prime mortgages (for which the market has nearly vanished in just 12 months). 

According to a story on Marketwatch, mortgage guidelines are more challenging for everyone to meet — gold-star credit borrowers included.

The Federal Reserve conducts a quarterly survey of senior bank lending officials and in its most recent survey, nearly half of the banks said that their respective underwriting process have tightened, forcing borrowers to “jump over a higher bar” in order to get approved.

As a home buyer and/or homeowner, you can’t do much about the banks, or the mortgage markets.  But, you can make strides to improve your personal application stronger and increase the likelihood of an approval. 

That process starts with your credit score. 

If you’re planning to make a move within the next 12 months, know that it’s never too soon to get a credit consultation from a trusted mortgage loan officer or other financial professional.  Yes, banks are now demanding more strength in income and in assets before approving loans, but without sound credit history, those other two factors may not matter at all.

The mortgage approval process will likely get more difficult before it begins to get easier.  Therefore, take proper steps to review and repair your credit (if necessary) well in advance of needing a home loan.  Time heals credit blemishes and you may find that it’s the difference maker in getting a lender’s mortgage approval.

Unprecendented tightening in lending standards
Rex Nutting
November 5, 2007.  3:06 P.M. ET


2 thoughts on “It’s Not Your Imagination : Getting A Home Loan Is More Challenging For Everyone

  1. Yes while money is getting tighter, this is when a true broker does the client good. It seems to me that a lot has gotten blamed on the brokers, and there are some bad ones out there. But a broker nows where to get a loan done, and whos underwriting is more tough this week.

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