In a move that could have huge implications on the housing market, the Federal Housing Administration (FHA) announced new steps that would encourage lenders to work with what are considered ‘riskier’ customers.
How does this affect potential new home owners? Credit restrictions that in the past may have prevented borrowers from qualifying for a home loan have now been loosened to help the approval process become easier. Under this initiative, borrowers with lower credit ratings or tighter credit restrictions are now more likely to qualify for a loan than any other time since the collapse of 2008.
This is huge news in a housing market that has seen costs skyrocket. Borrowers who now would have needed to wait a few more years for their credit scores to rise can move forward before home prices climb even higher.
The move will also help lender confidence as it allows the FHA to look over a much wider variety of credit scores to better determine which loans are acceptable risks. In the past, lenders were only able to compare a borrower’s credit to that of peers in the market, but now their credit scores will only be compared with FHA’s risk tolerance. This means that lenders will have more comfort handing out these loans and borrowers will have an easier time qualifying for them.
Overall, this is great news for all potential home owners and the housing market!
MonsterLoans is a privately-owned mortgage lender based out of Irvine, CA. Founded in 2003, MonsterLoans is the premier national mortgage lender specializing in VA, FHA, Harp, Fixed, ARM and Jumbo loans. With all services centralized under one roof, MonsterLoans is able to provide precise and specialized attention to every client, ensuring the best loan possible for each specific situation. At MonsterLoans, we depend on your loyalty and satisfaction, and our mission is to never let you down. For more information, please visit http://www.MonsterLoans.com