The Federal Reserve says that “bank lending continues to contract” despite market conditions that are supportive for growth. I’m curious to see what the next update of their statement will be after yesterday’s wild ride on Wall Street.
If you’ve applied for a investment property loan lately, you probably felt the extra scrutiny on income, assets and credit scores, among other things. Things are changing and getting tighter. The proof, however, can be found in the Federal Reserve’s quarterly survey of its member banks.
In the first quarter of 2010, 1 in 8 banks surveyed toughened their qualification standards.
Only 4% loosened them.
When we account for the Fed’s survey in conjunction with new underwriting standards from Fannie Mae and FHA, it’s clear that getting approved for a mortgage in 2010 is more difficult than many of us would have expected.
Today’s real estate investors and home buyers in Memphis have higher hills to climb
- Minimum credit scores are higher
- Higher downpayments
- Debt-to-Income thresholds are tighter
In other words, mortgage rates may stay low throughout 2010 (although the trend is higher), but that won’t matter to investors unable to obtain financing.
If you’re among the many residential real estate investors wondering when the right time to buy is, remember that along with a probable increase in mortgage rates, you now have a tougher lending standarts as mortgage approvals are getting more scarce.
Finding that foreclosure steal won’t matter if you can’t get qualified to purchase.
Popularity: 1% [?]
If you enjoyed this post, make sure you subscribe to my RSS feed!
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.