As another signal of an improving U.S. economy, the nation’s biggest banks have started to loosen mortgage lending guidelines. That’s really good news for people who want to buy a home in St. Charles but have been worried about whether they will qualify for a mortgage.
As reported by the Federal Reserve, last quarter, no “big banks” reported stricter mortgage standards as compared to the quarter prior and “modest fractions” of banks reported easier mortgage standards.
Getting approved for a mortgage in St. Charles and then getting it finalized has been pretty difficult in the past few years as lenders struggled with declining home values and increasing foreclosure rates.
Not surprisingly, as mortgage rates fell to all-time lows last quarter, nearly all responding banks reported an increase in demand for prime residential mortgages, which means buyers with good credit and low debt-to-income ratios are buying homes.
Consumers were eager to buy homes and/or refinance them last quarter and 6% of the nation’s big banks said their credit standards “eased somewhat” during that time frame. The remaining 94% of big banks said standards were left unchanged.
The ease of getting approved for a home loan, however, is relative.
As compared to 5 years ago, St. Charles home buyers face a distinctly more challenging mortgage environment. Not only are today’s minimum FICO score requirements higher by up to 100 points, depending on the loan product, applicants face new income scrutiny and must also demonstrate a more clear capacity to make repayments.
Tougher lending standards are among the reasons why the national home ownership rate is at its lowest point since 1997. It is harder to get mortgage-approved today as compared to late-last decade.
For those who apply and succeed, the reward is access to the lowest mortgage rates in a lifetime. Mortgage rates throughout Illinios continue to push home affordability to all-time highs.
If you’ve been shopping for a home in St. Charles or anywhere in the Fox Valley area, it’s a good time to explore whether buying a home is possible for you today. Please give me a call at (630)945-7935 and we’ll talk about your options.