Mortgage Credit Availability Increases

According to the Mortgage Bankers Association, mortgage credit availability is on the rise, making it easier for prospective home buyers to qualify for a loan to buy a home. The Mortgage Credit Availability Index measures whether lending standards are loosening or tightening. When lending standards are tighter, it means otherwise qualified buyers may not be able to obtain a loan because of strict requirements. When those standards loosen, more prospective borrowers will be approved for loans. In April, the index increased 0.5 percent. Mike Fratantoni, MBA’s chief economist, said the increase was due to new loan products becoming available. “The increase was driven by new offerings of FHA’s 203K home improvement program, new VA offerings, and new jumbo products,” Fratantoni said. “The increase was partially offset by some investors tightening underwriting criteria on conventional cash out offerings.” Of the individual index components, government loans saw the greatest increase in credit availability, rising 1.1 percent from the previous month. More here.