We all remember “The Housing Bubble” in 2007 & 2008 that affected almost half of American States. Many lenders were imploding one right after another. Companies I was familiar with and many friends I knew in Dallas got swallowed up when the “mortgage bubble ” burst. It was a stark reality for the mortgage industry. Those were the days where people were able to get approved for a mortgage even though they were not credit worthy.
Well, they’re back! It seems more lenders are willing to venture back into the territory once considered “subprime. ” With Interest rates rising, the refinance boom has tapered off and lenders are now having to compete for a smaller pool of purchase loans as National Mortgage News’ Bonnie Sinnock reports.
More and more lenders are loosening their underwriting guidelines on FHA, VA, and USDA programs. This time around, the cost for a borrower to purchase a home will be much more costly. With higher interest rates and larger down payments, lenders are charging interest rates as high as 8% to 10%.
But for a potential buyer, this is a risk they are willing to take in order to make their dreams of becoming a homeowner a reality.
Published on 2014-03-27 10:00:41
