The ability to qualify for a loan depends, in part, on current loan programs and lending standards. That means you’re ability to obtain a mortgage can be more difficult at some points and easier at others. That’s why the Mortgage Bankers Association keeps a monthly measure of mortgage credit. Its Mortgage Credit Availability Index gauges whether standards are loosening or tightening on a scale where any decline indicates credit has tightened and increases are a sign it has loosened. In August, the index fell 1 percent. Joel Kan, MBA’s vice president and deputy chief economist, says the decline didn’t affect all loan categories. “Credit availability decreased in August, as lenders reduced their offerings of loan programs that require flexible documentation, along with cash-out refinance loans,” Kan said. “Many of these loan programs had jumbo features, which contributed to the decline in jumbo credit availability. The conforming index was unchanged and remained in a narrow range as conforming lending standards and loan offerings continue to be conservative.” (source)
