In order to be approved for a mortgage, borrowers have to meet certain standards. How well they meet those standards not only determines whether they’re approved to borrow but also the terms of the loan they receive, should they be approved. Lending standards aren’t fixed, though.
This means, there are times when they’re stricter and times when they loosen. That’s why the Mortgage Bankers Association tracks mortgage credit availability each month – to help potential borrowers know what to expect. In April, according to their most recent report, lending standards loosened from the month before, making credit more available.
Joel Kan, MBA’s associate vice president of economic and industry forecasting, says credit availability has improved as the housing market and economy have made gains. “The uptick in credit supply comes as the housing market and economy continue to strengthen,” Kan said. “One trend that has developed in recent months is the rising demand for ARMs, driven by higher rates for fixed mortgages and faster home-price appreciation.” Still, despite the improvement, credit availability hasn’t yet returned to where it was before the pandemic’s onset last March. (source)