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 MCAI over 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:Bottom LineWhether 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.
Home Mortgages: Rates Up, Requirements Easing
By Pam Treece|2017-04-13T10:00:09-07:00April 13th, 2017|Categories: Down Payments, First Time Home Buyers, For Buyers, Interest Rates, Move-Up Buyers, Real Estate|