Tougher Getting A Deal Done In Knoxville……
Well all of my transactions are getting tougher now to get closed. You can no longer get a home closed in a couple of weeks. We are now seeing STRONG buyers taking 5-7 weeks to get a home closed in Knoxville.
Nationally, mortgage approval standards are tightening.
The data comes from a quarterly survey the Federal Reserve sends to its member banks. The Fed asks senior bank loan officers around the country whether “prime” residential mortgage guidelines had tightened in the last 3 months.
For the period July-September 2009:
- Roughly 1 in 4 banks said guidelines tightened
- Roughly 3 in 4 banks said guidelines were “basically unchanged”
Just one bank said its guidelines had loosened.
Combine the Fed’s survey with recent underwriting updates from the FHA and from Fannie Mae and it becomes clear that mortgage lenders are much more cautious about their loans than they were, say, 2 years ago.
Today’s borrowers face a host of hurdles including:
- Higher minimum FICO scores
- Larger downpayment requirements for purchases
- Larger equity positions for refinances
- Lower debt-to-income ratios
In other words, mortgage rates may stay low into 2010, but that won’t matter to homeowners that don’t meet minimum eligibility standards. With each passing quarter, that list gets smaller.
Therefore, if you’re on the fence about whether now is a good time to buy a home, remember that, along with an increase in mortgage approval standards, home values are rising, too.
What I see in the coming months is the rates are going to go up and get closer to 6%. Which is still a VERY good rate compared to 18% when I first got into the business. If you are thinking about getting buying a home consider taking advantage of my Buyer411 Program. If you have any questions or need some help feel free to call me at 865-675-8326 or email Rick@TheBigOrangePress.com Acting sooner is probably better than acting later.