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The Mortgage Bankers Association announced this morning that the number of people applying for a mortgage last week fell 1.5% as compared to the one that preceded it. While applications to purchase a home were flat, applications to refinance an existing mortgage fell 4.2%

Chief Economist Bob Walters of the nation’s largest online retail mortgage lender, Quicken Loans, says that many people may be waiting on a drop in interest rates to make their move – a drop that isn’t likely to occur in the near future.

“Mortgage rates have risen over the past month, which may have prevented some folks from applying for a mortgage. Consumers need to understand that credit anxieties in financial markets are likely to prevent rates from falling in the short term, and also are making loans even more difficult to obtain. As home values continue to decline and pent up demand for housing grows however, folks will begin to seek out a home mortgage in greater numbers.”

Despite those reports that obtaining a mortgage has become more difficult, Walters says FHA loans, loans guaranteed by the government, are helping thousands of people obtain financing who otherwise would have been turned away.

“Right now, FHA loans are gaining popularity among those who have already applied for a home loan to purchase a house or refinance their existing mortgage. FHA loans, which have less stringent equity and down payment requirements, continue to play a key role in helping more people qualify for both home purchases and refinancing of an existing mortgage.”

Walters says Quicken Loans, one of the leading direct FHA lenders, has seen a substantial increase in clients who are benefiting from the lower equity and down payment requirements.

Related Info

• Learn more about buying a home with an FHA loan.
• Learn more about refinancing your home with an FHA loan.

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