Getting a mortgage now is considerably easier than it was a year ago, according to the inaugural Zillow Mortgage Access Index (ZMAI).
In fact, access to mortgages is about two-thirds of the way back to 2002 levels, which was before the housing bubble and crisis distorted home values and borrowers’ ability to buy homes.
Access to home loans peaked in August 2004, the ZMAI shows, after which it gradually became more difficult to get a mortgage — until the crisis hit in 2007. At that point, mortgages were suddenly much harder to come by, with the tightest period being September 2010.
In the past two years, lenders have opened their doors wider, the Index shows. Now, many people who last year might have been eligible only for FHA loans because of their low credit scores or down payments are being offered conventional loans with private mortgage insurance.
“Modestly easier credit will help first-time buyers get into the market, which will have many benefits,” says Zillow Chief Economist Stan Humphries. “We’re a long way from again letting credit get too loose, but we’ll need to remain vigilant not to repeat the mistakes of the recent past.”
The ZMAI took into account credit scores, debt-to-income ratios, private mortgage insurance, second mortgages, non-conforming loans, the mortgage rate spread and Zillow Mortgage Quotes. You can read more about the results at Zillow Real Estate Research.