Higher Mortgage Credit Availability in November

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The Mortgage Credit Availability Index of the Mortgage Bankers Association rose in November 2014. It reached 114.6 after climbing by 1.2%.

MCAI was set to 100 in March 2012. An increase in this index indicates loosening of the mortgage while a decline indicates their tightening.

The increase of MCAI in November was preceded by a 2-month decline. The index dropped during both September and October of this year. Back in September, it was 116.3. In October, it dipped to 113.2. Despite climb in November, MCAI could not reach its September level.

The chief economist of the Mortgage Bankers Association, Mark Fratantoni, commented that the increase in credit availability in November was largely due to introduction of jumbo loan programs which allow cash out refinancing. He added that the appreciation in home prices and the larger equity requirements have most likely made some mortgage lenders more willing to allow specific borrowers to take cash out when they refinance their loans. On the other hand, the mortgage rates which still stay at a low level, make this opportunity more attractive to some borrowers.

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Since October 2012, the index has been following an upward trend even though monthly fluctuations have been present. Mortgage lenders have been loosening credit standards steadily.

A recent study conducted by Zillow revealed that homebuyers who earn the national median income and purchase the typical home in the United States make monthly house payment which is equal to 15.3% of their income in the third quarter of 2014. For comparison, renters spend nearly two times larger share of their income on rent – 29.9%.

During the period before the housing market bubble from the mid 1980’s to 2000, homeowners spent a larger share of their income on housing – 22.1%. The chief economist of Zillow, Dan Humphries, said that homeownership remains highly accessible to buyers who can provide a down payment.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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