When thinking about buying a house, most of us look at home prices and mortgage rates. Together, they can provide a rough idea of how much home we can afford. They aren't, however, the only factors that determine whether or not we're ready and able to buy. One metric that isn't as commonly checked but has a significant impact is mortgage credit availability. Put simply, the standards lenders use to determine whether or not a borrower is qualified aren't fixed. That means, there are times when it's easier to qualify for a mortgage and times when it's more difficult. The Mortgage Bankers Association tracks credit availability each month to gauge whether standards are loosening or tightening. Any increase indicates lending standards are loosening, while a decrease means they've tightened. In November, the index was relatively flat, falling less than 1 percent from the month before. Joel Kan, MBA's associate vice president of economic and industry forecasting, says government credit tightened while other loan types loosened. “The picture was different depending on the market segment,” Kan said. “An increase in conventional credit availability was offset by a decrease in government credit, as lenders reduced their offerings of government loan programs with lower credit scores, as well as those for investment homes.”
