Stricter eligibility requirements for purchase and refinancing
Roseville, CA- Lenders are reacting to the COVID-19 pandemic by making it harder to qualify for a mortgage. This includes purchase and refinance. The National Association of Realtors (NAR) is warning lending standards could grow more stringent if federal regulators don’t step in soon.
Starting Tuesday, JP Morgan Chase, the nation’s largest lender by assets, announced that the majority of new customers applying for a mortgage will need a minimum credit score of 700 and a down payment of at least 20% of the home’s value.
Over the past two weeks, other banks have enacted stricter eligibility requirements. Some are raising credit score minimums and others are completely halting jumbo mortgages. The tighter standards are making it more difficult for borrowers to take advantage of the lowest mortgage rates in history.
Banks are responding to the sudden wave of homeowners taking forbearance options to delay their mortgage payments as unemployment skyrockets, with more than 16 million out of work due to the pandemic. An estimated two million borrowers have already applied for forbearance. Banks must still make payments to securities investors even in the absence of those missed payments. This is limiting their ability to make new loans.
Julie Jalone – MagnumOne Realty
If you have questions about the current market or a homeowner considering selling and have questions, please feel free to contact me. I can be reached at the MagnumOne Realty office in Roseville (916) 899-6571 or by email to firstname.lastname@example.org (DRE# 01418097)