For some time now, there has been something for consumers to be concerned with in the mortgage market overall, whether that was rising prices, lender restrictions or, now, an extremely tight inventory. However, people seem to be generally happy with the way the market is working, even if they have some misgivings about certain aspects of it.
One of the big issues in the market over the past several years has been the perception that lenders were keeping too tight a lid on mortgage credit access, but that didn't prevent consumer satisfaction with the mortgage servicing industry from rising over most of the past few years, according to the latest U.S. Primary Mortgage Servicer Satisfaction Study from J.D. Power. That rising positive sentiment leveled out in 2017, as shoppers generally started to feel that financial institutions were more concerned about their bottom lines than their clients, but overall the general feeling about the industry remained positive.
"Based on our research, mortgage servicers have three very clear areas of opportunity to help drive success: effective onboarding, high-functioning self-service tools and call center best practices that optimize customer contact in step with changing customer demographics and needs," said Craig Martin, senior director, mortgage practice at J.D. Power.
If consumers remain concerned with their abilities to actually obtain a mortgage based on their credit scores and abilities to make sizable down payments, the good news is there's more help now than at any time in the past several years, according to The Los Angeles Times. For instance, lenders are easing purchase qualification standards because refinance business necessarily dries up as mortgage rates rise, meaning they are more likely to be lenient when it comes to both credit score and down payment requirements.
Moreover, mortgage-backing agencies like Fannie Mae, Freddie Mac and the Federal Housing Administration will typically allow consumers to get approved even with low credit ratings or down payments in many cases, the report said. For instance, the average credit score on FHA-backed home loans in June was 683, but more than a quarter of the borrowers it backed had scores of between just 550 and 649.
Inventory an issue
However, the growing ease of getting a mortgage may actually prove to be a hurdle for many buyers insofar as it puts even more shoppers into the market, and the inventory as it currently stands is extremely constricted, according to Seeking Alpha. This issue leads to what is clearly an affordability problem; home values are up considerably from where they were even at this time last year, and aren't likely to stop growing any time soon. Meanwhile, mortgage rates remain relatively low in comparison with historical norms, but have also risen relatively sharply over the past year.
With this in mind, it's still important for consumers to get into the market as soon as possible, simply because the sooner they do so, the more likely they will be to lock in a solid rate and a lower price. This effort could end up saving them tens of thousands of dollars over the lives of their loans.
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