Are Mortgages Hard to Get Now?

Many people that I talk to seem to think that getting a mortgage is harder than ever to get now.  Well compared to 2006, 2007, and the beginning of 2008 they are harder to get.  But that is more due to the fact that the underwriting standards back five years ago were a joke and anyone who had a pulse qualified.  The massive appetite that Wall Street had for mortgage backed securities and the lack of oversight by the SEC contributed to this wave of easy money, along with a whole list of other things as well.  That is a blog for

Another day.

Now the underwriting pendulum has swung back the other way to stricter underwriting guidelines, which is the way they should have been all along.  When I first started doing mortgages back in 1993 everyone needed to have a job, verify their income with a month’s worth of paystubs or two years tax returns if self-employed, people also need to have money for a down payment and of course they needed to show some desire to pay people back as evidenced by their credit report.

Today, it is no different than when I started.  People who have decent credit, can verify
their income, and have at least 3.5% to put down for an FHA loan (FHA loans allow this to be a gift from a blood relative or a spouse) or 5% down with a conventional loan will qualify for a mortgage. 

So yes, the banks are lending money.  They are just being much smarter about it.

Thanks for reading.