HomeVestors Knows That Mortgage Lending Standards Are Loosening


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Investors who have been turned down for a mortgage over the last couple of years should consider reapplying, as lending standards are becoming less strict. 

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years.  The company knows that real estate investors who have been turned down for a loan in the past should consider applying again in the near future.  Fannie Mae and Freddie Mac are looking to expand mortgage lending standards in order to better meet their customer’s needs.

Investors who are looking to take advantage of the loosening mortgage lending standards should consider obtaining a pre-approval letter from their bank.  This will allow them to know whether they are approved for a loan and for how much.  Investors who have a letter of preapproval will be able to narrow down their real estate search and be able to work with sellers who demand to know their financial capacity.

Mortgage lending standards have been so strict that even Ben Bernanke, ex-chairman of the Fed, was turned down when he tried refinancing his home.  This has given lending organizations a pause and given them a reason to reconsider how underwriting is performed.  The truth is that underwriting is an automatic process and is registering a significant number of false positives.  Don’t expect lending institutions to shy away from their automated process, yet expect them to change their approval calculations.

The reason that mortgage lending standards have been strict over the last couple of years is because mortgage lending institutions wanted to avoid the subprime lending that destroyed the housing market in 2008.  In response to this market melt down, lenders decided to over tighten their mortgage lending standards, causing many qualified individuals to be turned down.

Investors who found themselves unable to secure a loan during this time should try again.  The chances of being approved now have increased.  Those who can overcome the mortgage lending standards should be able to take advantage of extremely low interest rates and be able to leverage their capital.  Investors who find themselves in this position should search for a rental property in a growing section of the country.  Rental properties are the place to invest at the current time, as many people are giving up on home ownership and the numbers of tenants increasing throughout the country are growing.

Investors who want to capitalize on the mortgage lending standards now that they are being reduced should find out if they can obtain a loan at the current time.

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