New guidelines in the mortgage industry is making it tougher for many people to refinance or purchase a home. 100% loans are just about a thing of the past. The reason why is that Lenders have categorized much of Michigan as a "declining market" What that means is that Michigan home values are falling. Lenders are worried that if they make a 100% loan it may only be worth 95%. So what the lenders are doing is taking 5% off of the maximum value they will loan. So many banks and lenders will only 95% of the appraised value or the purchase price of the home.
Home equity lines are getting tougher to get. Chase will now only do 75% home equity loans in Michigan. Countrywide Home Loans sent out about 200,000 letters to clients across the country. They closed down the clients home equity lines. They just closed them down and the clients are out of luck. No warning. You do not have any available credit anymore on your home if you got one of those letters. I believe you will see many lenders following suit on high percentage home loans over the next few years. Home equity loans have some of the highest foreclosure and deliquency rates. So banks are going to be more careful about granting a home loan. For more on Michigan mortgages, credit scoring, and Michigan real estate go to my website www.russravary.com. Southeastern Michigan's #1 informational real estate and mortgage site. Have a great day Russ Ravary
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