Seattle Home Mortgage Loans Easier to Qualify For

Seattle mortgage qualification standards less restrictiveMortgage Lending Standards Ease - Our Seattle Buyers Still Frustrated

Yet another signal of an improving U.S. economy, the nation's biggest banks have begun to loosen mortgage lending guidelines. And while mortgages may be slightly easier to come by in the past few months due to less restrictive loan qualification standards, in the Seattle area anyway, we've still had buyers who experienced significant frustrations.

Lending Standards Relax... But Patience Still Required!

Last quarter, none of the larger banks reported tightening their mortgage lending standards when compared to the quarter prior and "modest fractions" of banks reported easier mortgage standards. While this is great news, a few of our recent home buyer clients wouldn't have known the difference, as their lending experience was quite frustrating - this can be especially true for first time home buyers. We recently had two buyers in Issaquah who were quite literally down to the wire in terms of "final" approval. And make no mistake - "final" approval may not come until hours before funding. Thus, when deciding to buy a home in Seattle, being prepared is crtical - along with a healthy amount of patience!

As mortgage rates fell to all-time lows last quarter, nearly all responding banks reported an increase in demand for prime residential mortgages where "prime residential mortgage" is defined as a mortgage for an applicant whose credit scores are high; whose payment history is unblemished; and, whose debt-to-income ratios are low.

Consumers were eager to buy homes and/or refinance them last quarter and 6% of the nation's big banks said their credit standards "eased somewhat" during that time frame. The remaining 94% of big banks said standards were left unchanged.

The ease of getting approved for a home loan, however, is obviously quite relative.

Obtaining a Mortgage Still Much More Difficult

Compared to 5 years ago, Seattle home buyers and rate shoppers face a distinctly more challenging mortgage environment. Not only are today's minimum FICO score requirements higher by up to 100 points, depending on the loan product, applicants face greater income scrutiny and must also demonstrate a more clear capacity to make repayments. And even when well-qualified, the lending process can still be quite daunting.

It is primarily due to these tighter lending standards are among the reasons why the home ownership is at its lowest point since 1997. It is harder to get mortgage-approved today as compared to late-last decade.

For those who apply for a mortgage and ultimately succeed, the payoff is the lowest mortgage rates in a lifetime. Mortgage rates throughout the Seattle area, and all of Washington state continue to push home affordability to all-time highs. It's quite likely, what was unaffordable to you 5 years ago, is well within reach today.

If you've been shopping for a home, or planning to refinance, with mortgage rates low, it's a good time to commit. Please contact us today to connect you with a lender who will get you on the right path to homeownership today!

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