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Fannie Mae: Consumers Unaware Of Looser Mortgage Guidelines

By Dan Green

Banks have loosened the mortgage rulebook and Fannie Mae’s National Housing Survey shows consumers haven’t noticed; An update on today’s mortgage rates and the current 5-day trend; The National Association of REALTORS® reports an increase in the Pending Home Sales Index despite lack of inventory and rising rates.

Banks Loosen Their Mortgage Approval Rules

Fannie Mae Housing Survey - Growella
Consumers think it would be “difficult” to get a mortgage

Mortgage guidelines are loosening, lenders tell us. But, consumers haven’t seen the memo.

According to the Federal Reserve’s Senior Loan Officer Survey on Bank Lending Practices, a quarterly questionnaire sent to the Fed’s member banks, lenders are reducing their hurdles for mortgage loan qualification.

As compared to last quarter:

In aggregate, fewer than 1 percent of mortgage lenders are working with tighter mortgage guidelines as compared to the start of year and that’s excellent news for today’s buyers of homes.

Buyers aren’t getting the message, though.

In Fannie Mae’s monthly National Housing Survey, a survey of 1,000 consumers nationwide and their feelings toward housing and home loans, the number of respondents who said “it would be difficult to get a mortgage today” spiked, adding six percentage points from the month prior.

There’s a disconnect somewhere.

Lenders report that mortgage rules have softened. Yet, consumers say they think it would be harder to get mortgage-approved.

The lesson here is that potential buyers should not listen to their instincts about whether they’re eligible to get a mortgage because those mortgage-approval instincts are likely to be wrong.

It’s better to connect with a mortgage lender and have an actual conversation. Find out for what you’re eligible and how much home you can afford to buy.

Today’s Mortgage Rates & Trends

Mortgage rates today and mortgage rates trends
Mortgage rates and 5-day trends

Mortgage rates are rising again today.

The past two weeks have been less-than-ideal for first-time home buyers, repeat buyers, and households looking to refinance or cancel that FHA MIP.

Rates are climbing and they’re taking mortgage payments up with them.

These are not rate quotes. For quotes, you’ll want to talk with a mortgage lender. And, remember that interest rates vary by person.

There are about a dozen traits that affect your mortgage rate quote including your loan size, your credit score, and the state in which you live. Your credit history can also have an effect.

Talk to more than one lender when you’re shopping for a mortgage. Comparison shopping will save you money.

Get A Free Rate Quote Now

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Pending Home Sales Rise For 2nd Straight Month

Pending Home Sales Index - National Association of REALTORS® - Growella
Pending Home Sales Index climbs through March 2018

The 2018 housing market remains strong.

Despite rising home prices, multi-year highs for mortgage rates, and a general lack of homes listed for sale, buyers and sellers are pushing forward.

According to the Pending Home Sales Index, a monthly take on housing from the National Association of REALTORS®, the number of homes under contract increased for the second straight month in March.

The Pending Home Sales Index differs from most housing market indicators because it’s forward-looking. It doesn’t measure home sales closed; it forecasts homes that will close.

And, so far this year, the Pending Home Sales Index forecasts strong home sales through the first half of 2018, and into the early part of the third quarter.

For home buyers, this means that sale prices should face upward pressure and that home affordability should drop through the summer, creating a challenging environment in which to buy a home.

If you plan to buy a home in 2019, then, consider moving up your timeline. Low-down payment loans can put homeownership in reach and mortgage rates, although cresting near seven-year highs, remain relatively low.

The cost of homeownership may never be as low as what it is today.

Written by Dan Green

Dan Green is a mortgage lending expert and the founder of Growella. Prior to Growella, Dan was a six-time, top-producing loan officer; and, ranked repeatedly among the top 1% of loan officers nationwide. Dan's home buying expertise has been in print and on TV with The Wall Street Journal, NPR, Forbes, CNBC, and others.

Dan Green Growella Headshot