Mortgage lenders tighten standards

Mortgage lenders tighten standards

Mortgage lenders tighten standards
The pandemic has made it increasingly difficult for borrowers to obtain a mortgage according to new data. The Mortgage Bankers Association reported last week that its Mortgage Credit Availability Index fell to 12.2 percent in April to its lowest reading since December 2014. Declines in the Index suggests that lending standards are tightening, making it more challenging for homebuyers to obtain a loan.

“The abrupt weakening of the economy and job market – and the uncertainty in the outlook – drove credit availability down in April for the second consecutive month,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The decline was largely driven by lenders dropping many low credit score programs.”

The Index has declined 16.1 percent from February showing the progressive tightening of lending standards as the pandemic stretches in to peak homebuying season.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.375 percent and 15-year rates are near 3.0 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.