With home sales on the mend, some banks, for the first time since the housing-market collapse, are advertising that they are lending again.
So just how hard is it to get a mortgage loan these days?
The answer depends less on whom you ask than who is asking.
Buyers who plan to live in the home are finding it much easier to borrow than vacation-home investors, said Dale Collins, a broker with Berger Realty in Ocean City.
"Nowadays it's a little easier than it was a couple years ago. It seems like the banks are starting to lighten up. They're still asking for two years of tax returns and credit scores," he said.
"Some buyers may own four or five homes. If you own multiple homes, it might be more difficult for a lender to say, 'Here's a fifth loan,'" he said.
Likewise, interest rates for investors typically are higher than those offered to people who intend to live in the homes, he said.
Banks that were demanding down payments of 25 to 30 percent are scaling that back to as little as 10 to 15 percent, he said. And buyers who plan to live in their new homes can even find deals that require no down payment.
For some first-time homebuyers, the state could be the answer.
The New Jersey Housing and Mortgage Finance Agency offers new fixed interest rate mortgages for 3.75 percent on 30-year loans. It's the lowest rate ever offered under the program.
The state program has a goal of lending $170 million to qualified borrowers. And members of the New Jersey Police and Firemen's Retirement System can qualify for even lower rates.
"For a first-time homebuyer, it will all come down to income, credit score and length of employment," Collins said.
Victims of foreclosure or short sales are still largely out of luck, said Jim Malamut, loan originator for the firm E-Mortgage in Pleasantville.
"You're excluded from buying a property for three to four years from the date of the short sale or foreclosure," he said.
Likewise, those with poor credit will have far more trouble getting a loan, he said.
"The worst credit scores seem to have much worse performance on paying the loans back," Malamut said. "Most banks require a minimum credit score of at least 620. FHA guidelines allow you to lend to people with lower scores, but none of the banks want to do that."
E. Robert Levy, director of the Mortgage Bankers Association of New Jersey, said borrowers' financial lives continue to be scrutinized.
"The criteria are pretty strict. Underwriting criteria and the regulatory scheme these days is pushing to have stricter underwriting of loans," he said. "Companies, all of whom reacted to the economic crisis, recognized the need to go back to more stringent requirements."
But Levy said the regulatory pendulum is starting to swing back in favor of borrowers after having made it virtually impossible for many to obtain a loan.
"People with poor credit scores and no equity or cash to use as a down payment are still having difficulty," he said.
Theresa Trainum, senior vice president for residential loans at Cape Bank, said it is still more difficult to get a home loan now than before the recession. Even homeowners who want to refinance their homes are finding some challenges.
"Refinancing is difficult because the values aren't there," she said. "Maybe they bought at $400,000 and now their house is worth $350,000 or $325,000. They just don't have the equity to do a refinance."
When housing prices were surging in 2005, lenders were more confident about offering loans because of the growth in the market.
"If it was in 2005 and you could sign your name, you could get a loan," she said.
Lending conditions today are about the same as they were 15 years ago before the local housing market skyrocketed, said Gina Tubertini-Loefflad, vice president of residential loans at Cape Bank.
"It's coming back to common-sense lending," Tubertini-Loefflad said. "Do you have the ability to repay? It's good for the lender and the borrower. You don't want to set the borrower up for failure."
Real estate investors have a higher burden of credit-worthiness than other buyers because they can walk away from troubled properties more easily, Trainum said.
"The criteria to get approval for investment properties is tougher, but rightfully so," Trainum said. "A lot of lenders have shut the door to investors. But we've found the quality of their credit is still quite high."
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