Q: What Lending Changes Do You Need to Know?

Here’s what you need to know about recent changes in the mortgage world.

On the whole, our real estate market is doing well. However, one of the challenges we’re seeing right now is that, although houses are being bought and sold, and we have a surplus of buyers in the market, the mortgage industry is changing every day. 

Despite rates being at a 60-year low, we’re seeing lenders tighten up on their regulations as far as to what minimum credit score is required, what debt-to-income ratio is allowed, and how much down payment buyers will be expected to pay. 

To overcome these hurdles, we’ve been educating our buyers on exactly what they need to be doing to maximize the financing options available to them. Regarding refinancing, lenders are also ceasing much of that activity altogether—of course, it depends on the specific mortgage company you’re working with, so be sure to ask the right questions early. 

To minimize risk, the lenders we’re working with are being more selective, opting mainly for A-rated borrowers: folks who are low-risk, have a high credit score, and can put more money down. Believe it or not, we’ve even seen instances where buyers experienced a one-point change in their credit and were suddenly no longer able to get the loan. 

I’m telling the agents in my office that those clients who were pre-approved two weeks ago need to be reassessed to make sure they’re still eligible today—yes, the lending world is changing that quickly right now. Our clients are being advised to stay in constant contact with their loan office in the event a new policy is adopted and it happens to affect their situation. 

Overall, the average days on market in our area is still very low; though it’s important to remember each price point has its own figure. The average is 63 days, and that’s factoring in escrow time as well. We’re seeing sellers receive 97% to 98% of their asking price, so the ratios are still right where they need to be. 

If you’ve been considering selling your property, now is the time to do it; I wouldn’t wait another 30 to 60 days simply for the sake of my own sense of comfortability. I’d act now while conditions are favorable. 

Reach out to us by phone or email with any questions you may have, and check out our website! We’d love to hear about your unique situation and help you achieve your real estate goals. We’re always here to help.