A Home Mortgage in Today’s Economy


Perhaps you have heard how difficult it is to secure a home mortgage in today’s economy. You may have even heard that home loans are so difficult to secure that many people should not bother with the process. Before we go much further, let’s dispel those rumors right now.

The way of mortgages today

Mortgage companies and mortgage lenders can and do make loans in any economy. The reason is very simple, if they choose not to make home mortgages available, they will not make money. Now ask yourself,  “Do you think home mortgage companies want to make a profit?” Obviously, they do, so let’s proceed.

Profit in mind

Over the past decade or so, most people looking for home financing have been doing so with one goal in mind – profit. They saw the huge gains to be made through real estate investments, and no matter what was asked of them, they’d do it for the chance to take out a home loan.

Money is needed all over the world

Today’s home mortgage market has a different type of customer. The dream of home ownership still exists for people all over the world. Consumers are no longer fixated on making profit from real estate. They are however interested in securing a home mortgage for their families.

The housing bubble

Over the years 2006 and 2007, an estimated $2 trillion worth of mortgages were made to home mortgage consumers. Many of these home loans were made with little or no documentation. Essentially, many borrowers were allowed to sign their name and if their credit score was high enough, they could qualify for nearly any loan amount on a home mortgage they desired. Obviously, this caused, what is commonly referred to as a housing bubble, to burst.

The re-evaluation of mortgages

Lenders were forced to re-evaluate how they make home loans. However, that did not stop them from doing business altogether. Today’s borrower can expect a much more detailed and intricate application process and all the necessary documentation to make a home loan will have to be provided.

More and more documents needed

Legitimate home loan borrowers who want to secure a home mortgage can do so if they are willing to endure the process in a more traditional fashion. That means providing proof of your income, tax returns, credit history and a willingness to make your payments in a timely fashion. Your payment history on your credit report will accurately detail whether or not you will qualify for a home loan.

Your mortgage loans is almost done

That is not to say that you will not qualify if you have bad reports on your credit history. Ultimately, mortgage lenders, based on two important principles, make decisions about who gets a mortgage. You must show the ability to pay the loan and make your payments in a timely fashion, and be able to document a willingness to do so. This is, and has always been, the primary criteria for qualifying for a home loan.

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