The latest news on low mortgage rates is attracting many home buyers and we are seeing an increase in demand over the past few months. However, low mortgage rates are not the critical factor in the home buying process. While average mortgage rates are still hovering below 5 percent, it has become very difficult to qualify and get a loan. Lenders have been far more scrutinizing of mortgage applicants’ financial documents, even those who seem to have plenty of collateral and spotless credit records are facing resistance. For buyers who do not fit in the conventional model- having verifiable income and high credit scores- it is especially difficult to get approved for a mortgage.
Along with low mortgage rates and bank approvals, another influential factor in the real estate market is the uncertainty surrounding the economy. While low mortgage rates are attracting more potential buyers into the market and are expected to remain low, they are looking for signs of stabilization. On July 22, 2010 the California Association of Realtors reported the median home prices in San Diego County in June 2010 to be $397,910, up 1.7 percent from May 2010 and an increase of 9.7 percent from last year. Local neighborhoods such as Carlsbad have also seen an increase in their median home price of 5.2 percent, and Encinitas median home prices have increase significantly by 13.6 percent over the past year. This is a positive sign of stabilization in the local real estate market, which helps entice more renters to become buyers. Recently, in some cases the average many renters are paying has surpassed the average price on a monthly mortgage on numerous homes.
For many home buyers their applications for mortgages are denied because they do not have sufficient equity in their existing home. With the banks putting a higher level of scrutiny every loan applicant, it is important to evaluate your buying power. A qualified applicant will have good credit, good income, and some equity to win over the lender approval.
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