Five Reasons for Easier Mortgage Loan in 2011

Find out what options you have if you need a mortgage this year.

While the mortgage and real estate industries have been all doom and gloom since 2007, there are five reasons why 2011 offers some hope that getting a mortgage will be easier.

1. The lenders that are left are probably here to stay for a while.. In 2008, 2009 and 2010, literally hundreds of lenders large and small went out of business. The remaining lenders have stabilized and should be here for the longer term. In addition, many new lenders are springing up to help fill new demand from new home buyers. The more lenders available the more competitive the environment for mortgage borrowers and that translates into more competitive rates.
2. The federal government continues to support mortgage financing this year. The federal government now runs Fannie Mae and Freddie Mac in addition to FHA. Together, these three entities help finance the majority of homes in the United States each year. Congress probably won't decide to withdraw government support this year. Even if does, changes won't be implemented by the end of the year.
3. Property values are stabilizing. Home values in many areas have stabilized or even started to increase. While some areas may still decline in value in 2011, the pace of decline has decreased. This allows lenders to get a better handle on home values that provide collateral for their mortgages, making approving loans easier. Lenders are fearful of making mortgage loans in a rapidly declining market, so this decrease in volatility is critical.
4. Underwriting requirements appear to have stabilized. As the mortgage market deteriorated over the past three years, mortgage lenders along with Fannie Mae, Freddie Mac and FHA continuously cut back on qualifying debt-to-income ratios and maximum loan-to-value ratios while simultaneously increasing minimum credit score requirements. While there is no evidence that these rules will be eased in 2011, it is likely that qualifying requirements will stay relatively the same.
5. New jumbo lenders are poised to re-enter the mortgage market.. Jumbo loans have almost all been provided through the high-balance conforming loan programs of Fannie Mae, Freddie Mac and FHA. However, those loans are capped at $729,750, leaving borrowers needing higher loan amounts without access to reasonable financing options. Lenders who offer jumbo loans are returning to the market with extremely competitive mortgage rates despite stricter qualifying requirements.

These five factors point to at least a more stable if not easier 2011 for mortgage loans as compared with the past three years.

The other important factor for 2011 is that although mortgage interest rates are projected to increase this year they should are still relatively low. While most economists forecast that an improving economy will result higher interest rates later this year, the actual increase should still keep mortgage interest rates below 6% for the entire year. Mortgage rates below 6% are considered historically low.

For a free mortgage pre-approval and an exact rate quote to help you purchase your next home, please email us or call us at 1-877-868-2503.

To see the current mortgage rates, visit our Current Mortgage Rates page.

For a free mortgage pre-approval and an exact rate quote to help you purchase your next condominium, please email us or call us at 1-877-868-2503.

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