QUESTION: Changes in the housing and mortgage industries have prompted many people to wonder: “Can you get a loan today?”
ANSWER: The answer is simple: Yes!
Despite the negative headlines over the past year, there’s actually plenty of money available for loans. In fact, reports indicate that over $2.7 Trillion in loans were originated in 2009. That’s over $1 Trillion more than 2008.
However, mortgages must make sense in today’s terms – not the looser standards permitted by lenders a few years ago.
What does this mean to borrowers today?
Lenders have returned to a pre-2000 mindset – a kind of “common-sense lending” that seeks long-term success versus short-term profits. That means lenders need documented evidence that a borrower is creditworthy and is likely to repay the loan. This creditworthiness is based on the four tenets of lending: the borrower’s ability to pay, willingness to pay, equity in the transaction, and the property itself.
With interest rates still near all-time lows and home prices at extremely affordable, low levels, it’s worth the time and effort to find out if you can benefit from common-sense lending in today’s real estate market.