May. 16, 2007 - New Pressures on Home Buyers

 Driven by increasing mortgage delinquencies, mortgage lenders are taking a deeper look at credit history, raising minimum credit score requirements and scrutinizing what the property is worth.  Add to these pressures the effects of rising gasoline prices on household budgets and the results are fewer qualified home buyers.

The tighter lending standards are making mortgages harder to get which is adding demands on an already soft housing market.  This added scrutiny is being applied to even those borrowers with good credit.  According to the Wall Street Journal, “Mortgage lenders say they are tightening standards in response from mortgage insurers, investment banks and investors who buy mortgage-backed securities.”

Some lenders are even going online to check that properties are as described; using sites such as craigslist.com to ensure that vacation home is not a rental property, which would make the loan riskier.  If self employed, lenders will Google you and look for a business license. 

There is a bright spot on the home mortgage front.  Bank of America recently launched a no-fee mortgage aimed at home buyers in hopes that it can boost market share despite slowing demand.  For more details go to www.bankofamerica.com.

 Added economic pressures on household budgets are the rising New Jersey gasoline prices hovering near $3.00 per gallon. These higher prices, annually, can suck thousands of extra dollars out of the pockets of potential home buyers, making qualifying for a home loan harder to attain.  News sources predict the high prices are here to stay.  Check out scambusters.org to learn 16 Easy Tips to Save Money on Gas Prices