After the U.S. housing bust, many potential homeowners couldn’t dream of getting a mortgage, especially those who had lower credit scores.
And it wasn’t easy also, because lenders got cautious, refused to throw money at all mortgage candidates, especially those with poor credit standing. Later, it turned out that those folks were at high risk of defaulting on their loans.
None of this is happening right now, but financial institutions are careful when approving an application.
Having said that, a recent trend began to emerge – it appears that lending standards are becoming looser, which experts consider to be a step forward to the reviving of the housing market. On the other side, all of those with lower credit score can also qualify more easily.
In that respect, two important things are happening: first, lower down payments are already a fact, slashed down from 20% to 10 or 15%; second, the overlays previously imposed by some lenders to protect themselves have also started to ease up.
Read the full story at Business Insider.