Florida Mortgage : Learning Center

    It seems the mortgage market is finally changing as it should have a few years ago.  The mortgage industry is finally limiting the availability of credit by tightening lending standards on popular mortgage programs that have perhaps caused so much turmoil with homeowners.  At last, first time home buyers and others with marginal credit issues, lack of reserves or income documentation fears will have to chill and rethink steps they should take towards buying their first home.  

My grandfather told me of the days when first time home buyers had to actually save money and put 20% towards a down payment; unless they were a Veteran.  And once the money was saved, you then had to qualify by calculating your debt ratios.  This is where a loan officer or banker would divide monthly revolving and installment debt (such as credit cards, car loan and student loans) by your gross monthly income.  That’s something I believe many loan officers that got into the business within the past 5 years have never been accustomed too. 

Many mortgage programs became available without needing to document income, assets, or employment!  And the notorious Option ARM mortgage became an option for almost every consumer, even first timehome buyers with less than perfect credit and without  a down payment.  Thats simply too much risk for lenders and too much pressure for new home owners who really couldn’t afford their dream home.

I am glad to see these changes are upon us because we need to step back into reality and have would-be homeowners contribute towards their dream of home ownership.  Save money.  Work on your credit profile. And talk to a mortgage professional to discuss the many mortgage programs that are available. 

Stephen Thaggard

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