How Florida Mortgage Approvals May Become Easier as Florida Home Values Increase

Florida mortgage applicants may see home loan restrictions ease up a bit within the next 18 months.

If decreasing home prices prompted Fannie Mae and Freddie Mac to make Florida home loan guidelines tighter in 2007 and 2008, Florida mortgage applicants may see home loan restrictions ease up a bit within the next 18 months.

Per a recent government report, the prices for homes financed with conforming mortgages (not FHA, VA, Jumbo, etc) increased for the third straight month in February.

This piece of data is important because as Florida home values move up, Fannie Mae and Freddie Mac’s loan portfolios become less risky.  Why should you care? Here’s why.

As the risk tied to Florida home values decreases, Florida mortgage companies can begin to assume more risk on individual home loan borrowers.  This will help home Florida home loan applicants who may now find themselves ineligible for conforming mortgage financing — often the least expensive source of mortgage money.

Despite aching for more of a profit on their loan products, it’s not very that Fannie Mae or Freddie Mac will loosen their home loan guidelines before 2010.  However, if the Home Price Index continues to show improvement, it’s good news for Florida home loan companies which, in turn, is good news for Florida home loan buyers!

Related articles by Zemanta

• Home prices edge up in February (money.cnn.com)
• U.S. home prices ease up in February (financialpost.com)