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How to's and money-saving tips from resident homeowner and mortgage professional, Cathy West

Mortgages should grow more popular as time goes on

One of the big concerns in the housing market over the past several years is that activity probably hasn't been as robust as it perhaps should have been. And that, in turn, seems to have been restraining a broader recovery for both the industry itself and the whole economy. But the good news for those in the real estate industry is that there will be a tipping point for more activity in the market, potentially in the relatively near future.

The longer the recovery continues, the more likely people across the country will have the financial wherewithal to make a purchase in the first place. One of the biggest issues that have held many people back is that their credit scores still aren't in good enough shape to make a purchase, or they don't have the tens of thousands of dollars they probably need in savings to make a purchase on even a moderately priced home. But as employment levels continue to rise and wages keep growing – albeit marginally – more people will probably be in a position to buy sooner than later.

What can be done?
For those in the mortgage industry that want to see more lending activity in the near future, though, it likely shouldn't be consumers they ought to be concerned with. Another big reason that many people can't make a purchase these days is that financial institutions continue to keep a tight lid on mortgage credit access overall. Some data suggests that it's still significantly more difficult than it was to get a mortgage prior to the economic downturn, and that's backed up by anecdotal evidence in the market itself.

That may be what's holding potentially millions of otherwise eligible buyers out of the market, because the kinds of scores and the size of the down payments now being sought by lenders may be too much for most Americans to meet given current economic conditions.

Good news and bad news
However, it's worth noting that most people probably aren't deterred in their goals to actually own a home one day just by lenders' standards. Polls routinely show that even if consumers can't afford to buy right now, they still have homeownership as a personal goal and will continue to pursue it.

On the other hand, many in the industry wonder which will happen first: A shift among lenders toward looser credit standards, or a decline in some of the extreme affordability seen in the market over the past few years. Conventional wisdom holds that as long as rates are low, lenders will do what they can to facilitate refinances, which tend to be safer than purchase loans, even at the expense of more activity in the market.

With this in mind, those who may be close to finding a home purchase affordable might want to put a little more emphasis on getting ready in the next few months, before rates and home prices alike start to tick upward.

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