In 2008, credit standards have been extraordinarily tight. As years go by, the credit standards became stricter and stricter. But according to the latest survey from Fannie Mae, loan availability is improving. Majority of potential home owners believe that it is easier to get a mortgage as compared before.
Mike Fratoni, Chief Economist for MBA said, "The market continues to adapt to the new QM (Qualified Mortgage) regulation by eliminating products that do not fit inside of the QM box. This tightening is being offset, both in the market for higher balance loans, where lenders continue to loosen terms for jumbo loans, and in the refinance market, where more lenders are offering streamline refinance programs."
However, there could be other factors that make credit more available. One factor is the mortgage delinquency rate. According to Transunion, a credit reporting agency, the mortgage delinquency rate for Q4 2013 was 3.85%, down from 5.08%.
Another factor can be the home sales and rising prices. Before the crisis, there was approximately five months of inventory available in the market. During the crisis, the months of inventory doubled as the home sale price declined sharply. Meaning, home sellers had to wait for a longer period and lower their selling price to sell their home because there was a shortage of buyers. At present, the market is back to its pre-crisis levels. According to Mortgage Bankers' Association (MBA), home prices grew by more than 10% in 2013.
Lenders are braver now when it comes to lending due to the government backing and settlements.
With employment rate improving, mortgage delinquencies is expected to continue declining. The latest January employment rate rose to 58.8%.
As credit standards loosen up, lower interest rates and improved employment rate, buyers should feel more confident in purchasing home in 2014.
If you need help in obtaining a mortgage loan, I can refer you to mortgage professionals that will guide you through every step of the mortgage process.