HOW EASY IS IT TO SECURE A MORTGAGE?

Getting a mortgage in the US is tougher nowadays – and less risky. For one thing, nomoney-down mortgages and their ilk, which enabled many borrowers to initially lower the costs of buying a home but often saddled borrowers with far higher balances or steep monthly payment increases, have vanished.

Banks also remain a bit wary after racking up billions in losses stemming from mortgages gone bad. That means homebuyers, especially those with less-than-stellar credit, face more hurdles qualifying for a mortgage than they did in the housing boom years. But the loans are safer, more transparent and actually take into account whether a borrower can afford to keep up with payments.

“The banks have certainly loosened underwriting criteria for low-risk borrowers; they haven’t loosened underwriting criteria for low-credit score borrowers,” says Aaron Terrazas, senior economist at Zillow. “The types of lending that we saw leading up to that crash in 2008, for the most part, we’re not seeing nowadays.”

Legislation aimed at averting another financial crisis set out certain guidelines that lenders must follow if they want to make their home loans eligible to be guaranteed by the government. The biggest change is a rule requiring lenders to establish the borrower’s ability to repay the loan. The guidelines may offer lenders a clear path on how to gauge qualified buyers, but banks have overlaid stricter qualifying requirements, like higher credit scores.

“The pendulum has swung too far in the other direction,” says Jesse Van TOL, chief executive of the National Community Reinvestment Coalition, which advocates for fairness in housing, banking and business.