Here are five ways that mortgage experts say the market is becoming more flexible:
1. Some lenders are easing payment and credit score requirements. Having a modest down payment or a lower than stellar credit score won’t necessarily keep you from buying a home.
2. Piggyback loans are popping up. The term describes two mortgages taken out at the same time for one property, so a borrower can avoid paying for private mortgage insurance on a traditional loan representing more than 80 percent of a home’s value.
3. Stated income loans are back. These don’t require tax-returns to prove income. The market is starting to see lenders advertising stated income loans, which will be helpful to so many self-employed borrowers.
4. Subprime loans are emerging again, but with a change. Before the housing crash, some lenders provided interest-only loans to people with bad credit and no collateral.
5. Rising interest rates could encourage competition. Interest rates are expected to continue increasing, with some analysts saying 30-year fixed-rate mortgages could hit 5 percent in the next 12 months.
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