Planning To Buy A Home In 2009? Expect A Tougher Mortgage Road Ahead.

By
Mortgage Banker with PrimeLending NMLS 135370

75 percent of banks surveyed reported that prime mortgage guideline got tougher in Q3 and Q4 2008The Federal Reserve confirmed what most of us already knew -- getting qualified for a "prime mortgage" is increasingly more difficult.

In a quarterly survey of 84 banks, 75 percent of respondent banks tightened mortgage guidelines over the last 3 months for the most qualified of home loan applicants.

"Prime" is a vague term when it comes to mortgages, but, historically, a prime borrower is one that can document:

  • A well-documented credit history
  • Very high credit scores
  • Very low debt-to-incomes

Historically, banks bent over backwards to lend money to this class of borrower.  Today, they're thinking twice.

The chart's steep ascent reinforces that members of all tax brackets face consequences from the current credit market turmoil.  And, although some corners of credit looked poised to recover -- interbank lending, for one -- the mortgage market is yet unaffected and should be among the last to thaw.

All prospective home buyers should prepare for the likelihood that mortgage guidelines continue to toughen before they start to ease.  Mortgage applicants on the cusp of being approved today will almost certainly be turned down for a mortgage in 2009.

Owning real estate can require a tremendous amount of advance planning and, sometimes, looking at the past is the best way to prepare for what's coming ahead. 

According to the Federal Reserve's survey, what's coming ahead is more mortgage application scrutiny.

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Topic:
Lending / Financial
Location:
Missouri
Tags:
mortgage
credit
qualify

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Rainmaker
399,180
Bill Kennedy
Homes For Sale Greenville SC
Keller Williams Realty

Welcome to Active Rain! This is a great website for building your business, as well as learning from others.  Pat yourself on the back, because you made a GREAT choice in joining the blogosphere!

Write often, and write whatever comes to mind.  Blogs about personal topics and non-real estate items are often the best.  It helps your readers to bond with you, and ends up bringing you a lot of business!

Good luck with your future blogging.  If you'd like more info on points in Active Rain, I wrote a blog about it (click here). Feel free to ask me any questions if you need a hand!

November 05, 2008 07:59 PM
Rainer
262,420
Jean Terry
Keller Williams Realty Spartanburg, S.C.

Hi and welcome to Active Rain, a great site to network, share, learn, and have fun. Good Luck.

November 05, 2008 10:39 PM
Rainer
153,983
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd.

Hi Bruce, Welcome to AR, Be a Blogholic and start writing your own blog soon on AR. All the best for your RE business. This is the right place for customers, friends, realtionships etc.

Best - Sash 

PS: FREE blog traffic strategy video...Hope this will help you... click here

November 06, 2008 07:34 AM
Rainer
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Dan Nord
Prudential Real Estate

Welcome to Active Rain, you've joined an excellent site to receive free marketing, share ideas, and network.  Have fun and enjoy yourself.  Good luck.

November 10, 2008 09:13 AM
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Rainmaker
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Bruce Brown

Senior Loan Officer/CMPS
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Additional Information

Daily mortgage market and interest rate commentary, information, data and news by Bruce Brown, CMPS with Prime Lending and radio host of Dollars and Homes on KCMO Talk Radio 710 and 103.7 FM in Kansas City.