Mortgage lenders believe first-time home buyers will make up a larger portion of their business in the new year, and they believe 3 percent mortgages are key to getting more into homeownership. The majority of the 200 lenders surveyed by Genworth Mortgage Insurance believe that the demand for 97% loan-to-value products will surge in 2018.
“As long as the underwriting is strong, borrowers going into higher LTV loans is completely prudent and safe,” Rohit Gupta, president and CEO of Genworth Mortgage Insurance, told HousingWire.
Industry professionals were divided on what they viewed as the most likely source of credit expansion in 2018. Forty-five percent of lenders said a higher mix of above-80 LTV loans, while 38 percent said a higher mix of borrowers with below-700 FICO scores. Seventeen percent of respondents said that a higher mix of borrowers with above-41 debt-to-income would be the most likely source of credit expansion.
“Despite their emergence as today’s fastest-growing homebuying demographic, first-time home buyers still face many headwinds,” Gupta told HousingWire. “While some of these, such as shortages in affordable inventory, are environment-driven, others can be addressed via improved awareness on the various low-down-payment solutions available in today’s market. Ensuring that the right tools from both a product and educational standpoint are in place is imperative to supporting the continued positive trajectory for these buyers.”
Source: “Genworth: 3% Down Mortgages Key to Lock in First-Time Homebuyers in 2018,” HousingWire (Nov. 16, 2017)
