St. Cloud readers who perused The Washington Post’s “Real Estate” section recently found a most encouraging piece of information—particularly if they were among many the younger and first-time home seekers who worry about qualifying for a home loan. And by the article’s finale, there was even one conclusion that sober-minded observers might decide had exceeded simple optimism…
The headline article— Many lenders are loosening requirements for prospective home buyers—provided ample evidence of widespread easing of mortgage qualification criteria. Apparently, there is a common acknowledgment that many of the lending guidelines that followed the housing crisis were overly restrictive.
Among the tweaks to underwriting rules that have grown common within the past year or two are “the availability of low down-payment loans, a loosening of the debt-to-income ratio requirements”—and even an easing of rules about how student loans are evaluated.
But unlike standards common during the housing bubble, today’s young and first-time borrowers will still need to show they will have the wherewithal to repay the home loan “as their income and careers grow.”
And then there was that final conclusion—the one that potential St. Cloud borrowers might judge as surpassing simple optimism. The Post argued that if home loan interest rates rise, that “could actually benefit some borrowers.” This lemonade-from-lemons conclusion arose from conjecture that “lenders will want to approve more loans when they can get a better yield from higher rates.”
That may be true enough, but it certainly isn’t a reason why prospective St. Cloud house hunters should stand by to wait for such a “benefit” to appear! Since the gist of the article convincingly lays out how lenders are already loosening requirements, today’s rates are worth locking up as soon as possible.
For this spring’s serious-minded prospects whose plans include a home loan, I recommend taking the time to pre-qualify. It’s a quick and easy way to get a fix on how much you can comfortably afford to pay—which will shape the list of St. Cloud properties you’ll want to visit. Whether or not you decide to pre-qualify (or take the next step of seeking pre-approval), give me a call as soon as it’s time to get started!
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