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Economy

As San Diego Home Prices Continue To Rise, Some Mortgage Lending Eases

As San Diego Home Prices Continue To Rise, Some Mortgage Lending Eases
If you applied for a mortgage last month and didn’t quite qualify, you might want to try again this month. Some lending standards have been eased to allow more people to get into the market.

If you applied for a mortgage last month and didn’t quite qualify, you might want to try again this month. Some lending standards have been eased to allow more people to get into the market.

Government controlled mortgage giant Fannie Mae is allowing borrowers to have higher levels of debt and still qualify for a home loan. Previously, the debt-to-income ratio was capped at 45 percent. Now it’s at 50 percent, making room for a larger house payment.

For example, for a household making approximately $7,000 in gross income a month, with a few hundred dollars in debt payments, it could mean a significant loan increase, said Mark Goldman, senior loan officer with C2 Financial Corporation and real estate instructor at San Diego State University.

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“Their ability to afford a home with 10 percent down went from about $455,000 up to about $540,000,” Goldman said.

Freddie Mac has allowed a 50 percent debt ratio since 2011, but on a much smaller scale.

Another big change is self employed borrowers are able to qualify for a mortgage loan with just one year of tax returns instead of two.

“So someone who had a big increase in their income in the last taxable year can qualify for a Fannie Mae loan,” Goldman said.

Goldman said the changes should help the region’s affordability.

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“One thing we look at is can a family with a median income qualify for a median priced home in San Diego,” Goldman said. “This will help that.”

San Diego’s median price of a single family home in June sold for $620,000 — nearly three times higher than the national average.