Loan Types

Self-Employed Mortgage Loans Louisville. When you take a look at what today’s real estate market is doing, it’s hard not to wonder if history is about to repeat itself. Are we looking at another housing crisis similar to 2008? Due to high demand and a shortage of workers and supplies, house prices are on the rise and so are interest rates. Self-Employed Mortgage Loans Louisville. Buyers are finding themselves in bidding wars and sometimes paying over the asking price to secure the property they want. Are homeowners overpaying? Will their homes still be worth more than what they owe on them a couple of years from now? If we look back to 2008, we will discover that the subprime loans that lenders were participating in were the primary reason for the housing market crash. Self-Employed Mortgage Loans Louisville. According to TransUnion, between 2007 and 2008 alone, the mortgage delinquency rate rose by 53%. When borrowers started defaulting on these loans, the foreclosures caused turmoil in the financial market as well as the stock market, causing what is being termed a global “Great Recession”. It was an epic financial and economic collapse that cost many ordinary people their jobs, their life savings, their homes, or all three. The Bureau of Labor Statistics reported that nearly 9 million Americans lost their jobs from the late 2007s through mid-2009. By the end of 2009, more than 3.9 million homeowners received foreclosure notices. Americans also experienced a severe loss of household wealth or home equity. Not only could they not afford to pay their mortgage, but if they tried to sell their house, it was worth less than what they owed on it, meaning that the mortgage was “underwater” or “upside-down”. Lenders have since tightened their belt straps to lessen their risk by revising guidelines and being stricter with the requirements of mortgage approval. Prior to 2008, subprime mortgages like no income/no asset verification and stated income loans were very common. Interest Only and Adjustable Rate Mortgages were popular too. However, buyers were finding that once the initial fixed-rate period expired and the new, higher market rate went into effect, they could no longer afford their homes. Some economists would even say that, in some cases, lending was too lax and reckless, sometimes deceptive, and the recession was inevitable.