Denver Home Mortgage : Where the mortgage market is heading
Its very hard to predict what is going to happen tomorrow. Let alone try to predict what going to happen 5 years from now. I am just going to give my most educated guess on what is going to happen in the Colorado mortgage market. I think as of right now most lenders are being overly cautious on approving loans now. Yes we did have a huge market melt down. Yes the lenders were way to lenient on approving mortgages. They had lenders that were loaning money to people with a 560 credit score. Not only were they getting a mortgage but this was for a loan for 100%. So with a 560 and no money out of pocket, people were able to get a mortgage on a house worth like $460,000. So I don't think this makes any sense at all. You can't even get a car loan with a credit score that low and no money down. So why would any one loan this person that much money. For the last 10 years prior to this home values around the country were gaining. So places in California were gaining 200-300% in that time from. So the lender was under the impression that the house value was going to go up. If the home value went up that much. The lender was under the impression that the borrower would not want to walk away form the house.
If the house had a $100,000 in equity in it. That person with the 560 credit score would not want to lose that equity. Did if ever happen. Yes of course people would still walk away. But that person would be a lot more likely to keep that house than they would if they actually owed $100,000 on the house. They all would want to start protecting their credit score. With that new mortgage on their credit report they would all so see a credit score increase.
