Temecula, Murrieta, and San Diego Mortgage Loans: Banks are Still Lending!

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You see it almost every day in the financial news, articles talking about how banks aren’t lending money.  While this is largely true, it absolutely does NOT mean mortgage lending isn’t happening.

Since 2008 banks have been on lock down with lending their own funds.  With all the economic unrest over the past several years the lack of lending probably makes good economic sense.  The first thing a bank wants to know before they lend any money is how they are going to get paid back.  When repayment is questionable, banks won’t lend.

This is where Fannie Mae, Freddie Mac, FHA and VA come to the rescue.  There is no sense in going through a long dissertation on how each of these entities influence mortgage lending, just understand they are all government entities that securitize, guarantee or insure mortgage lending done by banks.  In one way or another, these entities give banks the security they need to know they will receive repayment.  I have seen varying numbers, but +/-90% of all mortgage lending today has a stamp of approval from either Fannie, Freddie, FHA or VA.

These mortgages aren’t just for people with sterling credit, 20% down payments and making tons of money either.  FHA will finance 96.5% of a home purchase and there are programs that allow for much less than sterling credit.  This is true for refinance also, and, if you current loan is FHA you won’t even need an appraisal.  Fannie, Freddie and VA all have different variations of similar scenarios.

What’s the bottom line?  The headlines we are all reading are actually true about the banks.  They aren’t doing much lending.  BUT the headlines are also a little misleading.  Mortgage loans are being made under surprisingly aggressive terms every day as long as the banks have the virtual guarantee of repayment.

If you have been buying into the headlines, and sitting on the sidelines it’s time to dig in and find out what possibilities are.  You might be very pleasantly surprised.  Take advantage of the great interest rates and lower home prices today.  Don’t believe everything you read.

Franklin Loan Center | NMLS 237653
Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, 4131316
For questions or concerns please email info@franklinlc.com