Mortgage borrowers find it a bit easier to qualify

Lenders continue to loosen standards on home loans. Government and jumbo programs saw the most easing, while conventional conditions tightened.

At 122.0, the Mortgage Credit Availability Index (MCAI) was higher than it's been in at least four years, and possibly five years based on a historical graph.

An increase in the index – which provides a standardized quantitative index solely focused on mortgage credit – indicates that lending standards on home loans are loosening.

The Mortgage Bankers Association reported the index based on data from Ellie Mae Inc.
March 31, 2012, has been established as the base period, with an index of 100.

The index was up for the third consecutive month from 121.4 in March.

As of April 2014, the index was 113.8.

"The increase was driven by new offerings of FHA's 203K home improvement program, new VA offerings, and new jumbo products," MBA Chief Economist Mike Fratantoni said in a written statement. "The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings."

But while the trend has been improving, credit standards remain nowhere near levels during the pre-crisis go-go years – with the index estimated to have been approximately 880 in 2006.

The Government MCAI rose 1.1 percent from March, the best month-over-month improvement of any loan type.

A 0.8 percent rise was recorded for the jumbo index, while credit standards on conforming loans eased 0.2 percent.

The only category to tighten was conventional, with that index contracting 0.6 percent.

Repost Courtesy of and Copyright © 2015 Mortgage Daily. Distributed by Tribune Content Agency, LLC.
Original post here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=323208

CAN A MORTGAGE PREAPPROVAL FALL THROUGH??

CUSTOMER QUESTION: Can a Mortgage PreApproval Actually Fall Through?

ANSWER: Yes, of course it can fall through. Generally speaking, what you get when you first apply for a mortgage is a PreQualification, not a PreApproval. The mortgage broker checks your credit, enters all your income data into the computer system, and then puts in basic information about you and the property you want to buy.

Based on this information, the mortgage broker generally issues a PreQualification Letter, which basically says that given the information you've provided thus far, you seem qualified for the mortgage you're requesting.

A PreApproval actually comes from ALL of your information not only being in the system, but also verified by the underwriter. In other words, they've seen your tax returns, spoken to your employer, and know that if the property appraises, they'll give you the loan. Most companies do not go this far until they're actually in the process of trying to actually close your loan. Frankly put, the underwriters want EVERYTHING before they commit.

Regarding either of these documents falling through - they can fall through for a variety of reasons including information not being verified, the property not appraising for the proper amount, the buyer not having the proper amount of funds in reserve to provide the lender with a proper comfort level, etc. In addition, most mortgage companies pull a copy of the buyer's credit report again just before closing to make sure there haven't been any major changes.

The changes that most frequently sabotage a prequalification or approval are change in credit score due to recently reported new information (like an old collection just popping up finally), or the buyer actually changing their credit patterns. If you normally make your regular monthly payments and you suddenly pay your balances in full, this actually causes a temporary drop in your credit score - basically, the scoring system assumes you paid it off using a balance transfer from another account, so it deducts points for a cycle or two to double-check. Other credit-changing items include additional credit reports being pulled by other creditors - including other mortgage brokers, if you're shopping around. A lot of people make the mistake of financing the furniture for their new house before they close, which can show up at just the wrong moment. Still others make lots of major changes all at once - like buying a car as well.

By the way, shopping around for a good mortgage rate is not a bad idea. The scoring systems generally count any inquiries that happen within a 14-day period as one inquiry - but only after the end of the cycle. In other words, if I pull your credit today, another broker pulls it tomorrow, and another one in 8 days, all 3 will lower your score as you go, but at the end of the cycle, they'll be re-counted as one inquiry since they all fell within a 2-week period. The same holds true for inquiries when car shopping.

The best idea, however, is to have your credit pulled initially by the company you think has the best chance of earning your business - since they'll actually show the best score. Then, you ask the broker for your actual credit scores - rather than allowing the other companies to pull your credit - just give them the scores, they should be able to do their jobs without needing to actually pull the report. Of course, if you opt to go with one of the other companies, they'll eventually need to pull the actual report.

That's just a general overview... hope it answers your question. If you have additional questions, please just ask.

Thanks for the opportunity to earn your business.

All the best,

--Dr. Branon A. Edwards, ePRO
Licensed Florida Real Estate Broker and Mortgage Broker
Direct Phone: 786-417-4910
Private Fax: 786-524-5747
mailto:Branon@InvestFloridaRealty.com

VISIT OUR WEBSITE:
http://www.InvestFloridaRealty.com

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http://www.InvestFloridaRealty.BlogSpot.com

Real Estate Office:
Aqualand Realty, Inc
8359 Stringfellow Road
Saint James City, FL 33956

Mortgage Office:
Mainland Mortgage Corp
351 S. Cypress Rd. Ste. 303A
Pompano Beach, FL 33060

Thank you for the opportunity to
EARN your business.