New demands make mortgages harder to get

WASHINGTON – Oct. 30, 2008 – Even homebuyers with good credit are having trouble getting mortgages with terms they find attractive.

Lenders are demanding much higher downpayments, often about 20 percent, and sometimes even higher. Jumbo home loans, ranging from $417,000 up to $750,000, depending on the local market, are particularly hard to find because private banks are no longer investing in them.

Properties, as well as buyers, are facing extra scrutiny. Some lenders now require a second appraisal to reassure them of a property’s true value, slowing the buying process and increasing closing costs by hundreds of dollars.

Plus, the wave of consolidation among financial institutes has led to confusion and further delays over mortgage processing.

Source: USA Today, Stephanie Armour (10/28/2008)

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