Lending criteria is changing
January 26, 2007 | Mortgage | 
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Mortgage lenders are?revising?qualifying criteria for?Alt-A Fixed and ARM products to reflect the changing market-place and?their tolerance for risk. The rapidly rising rates cause lenders to be more stringent and these will directly affect borrowers ability to qualify.
The following are highlights of the changes:
- Reduced CLTVs for cash-out refinances
- Changes to maximum loan amounts on Non-Owner Occupied and Second Homes
- Changes to No Doc requirements
- Increased credit score for Non-Owner Occupied SIVA and No Ratio doc types
Many of these changes have taken effect this week. This type of lender adjustment happens very quickly when rates are moving up. However, when rates fall they are not as fast to respond, unfortunately.
If you are in the loan process while rates are rapidly rising and have not locked your loan you are subject to changes. It is important to monitor rate activity while in the loan process to be aware of this exposure. Your loan officer will typically not say anything until after the fact.
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