The mortgage market has changed dramatically in the last two years, but we are starting to hear good news.  Seems as though banks have stopped tightening mortgage guidelines.  this is one more sign that the recession may be waning and the economy improving.

What are the changes we have seen over the last two years?

  • Banks expect addional assets and reserves, including retirement funds
  • You need to have worked for your employer longer
  • As a homebuyer, you need a larger downpayment and more equity in the property
  • Minimum FICO scores are 120 points higher than before
  • Debt-to-income ratios must be lower  (no more 40% of your income going for the mortgage!)
  • Second mortgages over 80% are difficult to get

As the savings rate increases and the recession eases, more people will have improved their chances of becoming homebuyers...a good sign for the economy in general...especially carpenters, drywall installers, plumbers, electricians, window installers, brick layers, furniture salesmen, appliance stores, mortgage loan officers, and Realtors...and we could go on and on.