It's not your imagination -- getting approved for a home loan really is becoming more difficult.Taken from the Federal Reserve's quarterly survey of 84 banks, it illustrates the changing dynamic of mortgage guidelines.
Most notable is the steep curve for "prime" mortgages, a type of home loan given to applicants exhibiting:
* A well-documented credit history
* High credit scores
* Low debt-to-incomes
Americans have come to expect sub-prime loans to be tougher, but it's the sharp tightening of prime guidelines that shows us that nobody is exempt from the newly tightened underwriting guidelines that banks are exhibiting right now.
If you plan to buy or refinance a home over the next year, consider a popular expression in financial circles -- the trend is your friend.
Know that mortgage guidelines will get tougher before they get easier and applicants on the brink of being approved today will almost certainly be denied a mortgage three months down the road.
Owning real estate and making sound financial decisions requires a fair amount of advanced planning. Sometimes, looking at the past is a prudent way to prepare for what's coming ahead.
According to the Federal Reserve's survey, what's coming ahead is more scrutiny and tightening standards.
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