Getting a Florida mortgage may have just become harder. Though the nation’s economic outlook has improved and Congress is encouraging lenders to lend more money, mortgage banks and Florida mortgage lenders don’t seem ready to open their purse strings just yet. Yep, at a time when we need money to be flowing into the hands of responsible mortgage borrowers, mortgage approval standards are tightening.
This information stems from a quarterly survey the Federal Reserve sends to its member banks. The Fed asks senior bank loan officers around the nation whether “prime” residential mortgage guidelines had tightened in the last 3 months.
For the period July-September 2009:
- Roughly 1 in 4 banks said guidelines tightened
- Roughly 3 in 4 banks said guidelines were “basically unchanged”
Just one bank said its guidelines had loosened.
Combine the Fed’s survey with recent underwriting updates from the FHA and from Fannie Mae and it becomes clear that mortgage lenders are much more cautious about their loans than they were, say, 2 years ago.
Florida mortgage borrowers face a host of hurdles including:
- Higher minimum FICO scores
- Larger downpayment requirements for purchases
- Larger equity positions for refinances
- Lower debt-to-income ratios
In other words, mortgage rates in Florida may stay low into 2010, but that won’t matter to Florida mortgage borrowers who don’t meet minimum eligibility standards. With each passing quarter, that list gets smaller.
Therefore, if you’re on the fence about whether now is a good time to buy a home, remember that, along with an increase in mortgage approval standards, home values are rising, too.
Acting sooner on getting your Florida mortgage financing in order is probably better than acting later.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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Good advice.. It looks like the trend is really going towards getting the good buyers to buy now, and stay in their homes. The powers that be really are doing what they can to see that the housing crisis isn’t repeated. The unfortunate thing is that some of the things they’re doing are making it very difficult for some very qualified buyers to have the means to actually buy…
As a Florida mortgage broker I speak to people all day long about real estate. Recently I’ve noticed that many of the long time optimists have given up. You know the old saying about it being darkest before the dawn? I say that the sun is on the way. My intuition may be a bit questionable, but there is some common sense at work here as well. The markets are driven by psychology. Prices are always highest at the peak of demand – and high demand always sustains an inflated sense of value. Prices are lowest when demand is the least – and when demand is down sellers lose their belief in value. By the time that everyone is perceiving value in Florida real estate again the prices will be far less accommodating. Time will tell…