So the interest rates are rising and the real estate market is cooling off and coming out a pandemic that has created some very unusual times in todays real estate market, having over supported the market and now having to find its own support levels has provided some dramatic market swings yielding price changes that have been both good and not so good especially to those individuals looking to get into the market if at all possible.
The situation is with the inverse relationship of interest rates and market price only means that the housing market has lowered the average price to compensate for the rise in interest rates so to say it's all balanced is fine until you go to get a mortgage, and thats where the happy ends. The process has changed as the attempt to "cool" the market has caused lenders to to change the requirements for what is needed to move forward to purchase your home and how is this done you may ask? Well easy lender can impose higher standards than what is need for any type of loan other than a conventional and this means for government supported loans this just became harder to obtain.
This is possible and very easy if the federal government wants to make loans harder to obtain lenders can increase the requirements necessary or mover the bar all together but requesting borrowers have a higher credit score, so the lending standards can be higher than what is known by mortgage brokers and bankers and triggering an unwarranted denial, as the rule of thumb 580 credit score is the primary lending requirement for a FHA loan but lenders who actually do the lending can ask for a credit score above that just never lower that the requirement, rules can be MORE stringent just never LESS than the minimum guidelines imposed be FHA and other government backed programs. So in the real estate market pricing may be falling and looking more attractive but the real story is in the mortgage market which is looking rather challenging for those individuals looking to get into a home on a government sponsored loan program.
So a slowed market just may be a stopped market as lending is becoming more chilling and more cold from a smoking hot real estate market, the ways in which one can melt chill of a cooling market is to work with diversified lender who has the options free of offsets and remain true of the original VA or FHA matrix.
Commentaires