Borrowers find easier time acquiring residential financing
Posted on Wednesday, March 12, 2014 at 9:06:30 AM
Over the past several years, the ease in which borrowers have had acquiring residential financing has trended up and down. Based on economic conditions and other similar factors, this can have drastic ripple effects throughout the housing market.
However, positive news has emerged from this segment. According to the Mortgage Bankers Association, mortgage credit availability ticked up in February compared to January.
"For the third month in a row, mortgage lenders and investors slightly expanded credit offerings in February on net, as a result of offsetting factors," said Mike Fratantoni, MBA's chief economist.
Overall, the MBA noted that lending standards loosened slightly during that time period. The Mortgage Credit Availability Index increased 0.44 percent from January to February. A figure that drops represents tighter conditions. These trends have appeared thanks in part to several new residential financing options for buyers.
Traditionally, borrowers have to ability to pursue a fixed-rate mortgage or an adjustable-rate one, according to USA.gov. The former has an interest rate that holds steady over a longer period of time. This is often ideal if homeowners intend to stay in one place for an extended amount of time. On the other hand, ARMs often carry shorter lengths, but if rates tick up, loan payments will as well.