Home Mortgages: Rates Up, Requirements Easing
The media has extensively covered the rise in mortgage interest rates since last fall (from 3.42% last September to the current 4.1% according to Freddie Mac). However, a less covered aspect of the mortgage market is that requirements to get a mortgage have eased while rates have risen.
The Mortgage Bankers Association (MBA) quantifies the availability of mortgage credit each month with their Mortgage Credit Availability Index (MCAI). According to the MBA, the MCAI is:
“A summary measure which indicates the availability of mortgage credit at a point in time.”
The higher the index, the easier it is to get a mortgage. Here is a chart showing the MCAIover the last several months as rates have increased.
Have requirements for attaining a mortgage actually eased?
Yes. Here are two examples:
- FICO® Score – the credit score which helps determine a buyer’s eligibility. The score required to attain a mortgage has been falling over the last five months:
- Down Payment Requirement – the percentage of the purchase price necessary to place as a down payment on a home. To make this point, let’s look at the percentage of first-time buyers who have put less than 5% down over the last several years as compared to the 1st quarter of 2017:
Whether you are a current homeowner looking to move to a home that will better serve your family’s current needs, or a first-time buyer looking for a starter home, it is easier to get a mortgage today than it has been at any other time in the last ten years.
- 2019 Buyer and Seller Guides - March 19, 2019
- 2019 Will Be a Great Year for Buyers AND Sellers - February 20, 2019
- How to Get a Better Perspective on Affordability - February 10, 2019
- Why It Makes No Sense to Wait for Spring to Sell - January 30, 2019
- How Does the Supply of Homes for Sale Impact Buyer Demand? - January 30, 2019
- The Best Time to List Your House? TODAY! - January 14, 2019
- How Much Has Your Home Increased in Value? - September 24, 2018
- Home Prices Have Appreciated 6.9% in 2018 - September 18, 2018
- Are Homebuyers Starting to Hit the ‘Pause’ Button? - September 16, 2018
- Charles Nagy and Theodore Van Laar win Second Quarter Sales Leader Award - August 6, 2018