Florida mortgages have proven to be safer and more transparent, according to Florida Trend. Today, lenders are more concerned about borrowers making the payment for the full term of the loan. As a result, lending standards remain stricter than before the 2008 housing crash that resulted in homeowners defaulting on their mortgages.
Loose Lending Standards Leading to the Housing Crash
In 2007, the U.S. entered a mortgage crisis. Homebuyers and people refinancing their homes were able to borrow more money than ever before, at a time when the lending standards were historically low.
Borrowers with low credit scores increasingly qualified for subprime loans, as lenders approved no documentation and low documentation loans that did not require income verification.
Popularity of option-arm loans also allowed borrowers to make small house payments when first buying a home. Many borrowers, however, were not able to pay their monthly mortgage payment once the interest rate increased, causing their payment to skyrocket in some cases.
Safer Mortgages and Tighter Lending Standard in Florida
Today, some borrowers in Florida have a tougher time getting a mortgage to buy or refinance a home, because of tighter lending standards. This is positive for borrowers because Floridians who qualify for a mortgage today have a safer mortgage as a result of stricter standards.
Home loans in Florida today are safer, more transparent, and are more likely to fit the lifestyle of buyers. Borrowers are more likely to afford their home loan, and more likely to live within their means.
Private Lenders in Florida
As a result of tighter mortgage regulations aimed at avoiding another financial crisis, the private market for mortgages in Florida is a small fraction of what is was prior to the housing crash.
US News says, “Mortgage-backed securities issued by private firms now represent about 4.5 percent of the market, according to data from Inside Mortgage Finance and the Urban Institute. In 2006, the peak of the housing boom, it was nearly 60 percent. Government-sponsored enterprises such as Fannie Mae and Freddie Mac now account for about 95.5 percent of the market.”
Mortgages in Florida are safer, but it’s also more difficult to qualify for a mortgage as a result of tighter mortgage standards. This has resulted in happier households who are not struggling to pay a mortgage that is beyond their means, and a more vibrant state economy with a stable housing market.
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.