What is in store for borrowers/buyers next? The credit market is continuing to tighten. Restrictions are continuing in the form of guideline changes. The guideline changes are requiring higher credit scores for the lender's programs. For FNMA "Fannie Mae" there have been increased rates for lower credit scores and higher loan to value ratios.
The reasoning is the lower the credit score the higher the risk of default/Foreclosure. The higher the loan amount to the value of the home the less the borrower has invested and the easier it is for the borrower to walk away. The problem with this reasoning is that MOST people pay their mortgages. It is the minority that is ruling the majority in this case by creating issues due to foreclosure. Now don't get me wrong the minority is 3 - 5% of the homes in America that are in trouble or have been foreclosed upon. this is a huge number BUT look at it the other way 95% to 97%of Americans are paying their mortgages! A majority of mortgages are good. The system is trying to increase rates on the higher risk categories and the mortgages system should! If there is an increased risk of default the lender HAS to protect itself with an increased rate for all borrowers that fall into this category to plan for the borrowers that do get foreclosed on.
For more information about mortgages and your opportunities to purchase home with straight answers to your questions please contact me via my website at: http://www.new-hampshire-home-mortgage.com
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