(617) 913-1721

info@linkinghouse.com

Bubble Alert! Is it Getting Too Easy to Get a Mortgage?

There is little doubt that it is easier to get a home mortgage today than it was last year. The Mortgage Credit Availability Index (MCAI), published by the Mortgage Bankers Association, shows that mortgage credit has become more available in each of the last several years. In fact, in just the last year

– More buyers are putting less than 20% down to purchase a home

– The average credit score on closed mortgages is lower

– More low-down-payment programs have been introduced

This has some people worrying that we are returning to the lax lending standards which led to the boom and bust that real estate experienced ten years ago. Let’s alleviate some of that concern.

The graph below shows the MCAI going back to the boom years of 2004-2005. The higher the graph line, the easier it was to get a mortgage.

Here is a graph showing their findings:

Again, today’s lending standards are nowhere near the levels of the boom years. As a matter of fact, they are more stringent than they were even before the boom.

Bottom Line

It is getting easier to gain financing for a home purchase. However, we are not seeing the irresponsible lending that caused the housing crisis.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. LinkingHouse, LLC. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice.

Mitra Farzani

Related posts

3 Expert Insights On Inventory In The Current Market

by Mitra Farzani

Are Low Interest Rates Here to Stay?

by Mitra Farzani

Why Millennials Choose to Buy?

by Mitra Farzani