A few weeks ago I sent an email to my clients titled “Credit standards ARE loosening” which was inspired by a blog FHA 203(b) Loans for North Carolina borrowers with 620 Fico Scores . In that email I pontificated that because of rising interest rates, the Fed exiting the space it has occupied for too long as well as improving real estate sales, private equity was returning to the marketplace and that we would begin seeing a relaxing of lending guidelines.
“One of the primary concerns I hear from Realtors is that credit standards are still, too tight, and they are right! Even though interest rates have begun to creep up, one of the benefits of higher rates is that both investors and underwriters are beginning to ease up on credit standards because the increased margins allow for greater risk.” Ricardo Cobos – Mortgage Lender
Even though borrowers still have to income qualify, show a willingness to repay their obligations when due, and property conditions remain tight, this is a great indicator that even though mortgage rates are rising … credit standards are beginning to decline commensurate to the rise in rates. What this means is that people who just a few months ago were denied access to credit might now be eligible once again to purchase a home. No longer do you have to have excellent or A++ credit in Raleigh to get a loan to purchase a home, even C-grade credit may now qualify!
Ricardo Cobos is a licensed mortgage loan officer in Raleigh-Cary-Durham North Carolina who has been helping families achieve financial security through responsible home-ownership since 1998. (919) 526-0183
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