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 July 18, 2007

First-time Home Buyers Driven Away by Tighter Credit Standards
First time buyers are finding it harder to get a loan for the home of their dreams due to higher interest rates and tighter lending standards.
Stephanie Gagnon, a loan officer with First Capital in San Diego states that she turns away half of her first-time home buyers, sighting that they just can't qualify for a loan within the newly tightened lending standards.

Just one year ago, Stephanie would have had little trouble getting most of her applicants approved for loans. Today, however lenders have discontinued programs which enable applicants with weak low credit scores to obtain mortgages. The discontinuation of these programs has made it much more difficult for applicants to get loan that have limited credit histories, large outstanding student loans and car payments.

The National Association of Realtors reports a 70% decline in first-time buyers that have entered the market within the last year.

In the past, the largest number of buyers has been first-time home buyers. This significant decline has taken the real estate industry by surprise in many areas.

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