One of the questions we get asked most often from clients is, “What are the differences between the mortgage meltdown and the way the mortgage market is today?” The number one difference that we can see is the lending standards that are in place. In 2008, through that period, there was very loose lending standards. You barely had to have a credit score, you could be just out of bankruptcy or foreclosure, you didn’t have to prove income, you didn’t have to prove your assets. You basically could just fill out the application and voila, qualified for a mortgage loan.

What did that result in? It resulted in a lot of fake demand, but it also resulted in American’s pulling out an insane amount of money out of their home, equity stripping. we found this little graphic and wanted to share with you.

2008 vs. Now: Are Owners Using Their Homes as ATMs Again?

During that period of 2005 to 2007, there was $824 billion extracted out of homes’ equity into cash and then used for whatever it was used for. Probably very nice vacations. Now let’s take a look at today. Today, between 2015, ’16, and ’17, only $174 billion has been pulled out in equity lines and cash out refinances. That is an 80% decrease in the amount of equity that has been extracted out of homes. In fact, home equity levels are at an all time high as we write this today. 

So the answer is NO, people are not using their homes as ATM machines like they were before the mortgage meltdown.

We recently wrote an article titled “What is the Best Month to Buy a Home?” Absolutely love you to take a look at that article because the fact is that December and January have the lowest amount of traffic and afford you as a buyer the absolute best opportunity to negotiate closing costs and to negotiate the sales price of the home down.

we would also like to introduce you to HomeScout. It’s the only mobile device out there that has a live link into the multiple listing service so you’re not getting your information on delay, and you’re information is 100% private. If you want to search better than on other sites like Zillow and that don’t have live access to the MLS, Download homescout free today:

Let us know how we can help you with your next home purchase!

Copyright©2017 Fairway Independent Mortgage Corporation. NMLS#2289. 4801 S. Biltmore Lane, Madison, WI 53718, 1-877-699-0353. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. Fairway is not affiliated with any government agencies. Fairway is required to disclose the following license information. Alaska Mortgage Lender License No. AK2289; Arizona Mortgage Banker License No. 0904162; CA: Licensed by the Department of Business Oversight under the Consumer Finance Lenders Law; Loans made or arranged pursuant to a California Finance Lenders Law License #262571; Illinois Residential Mortgage Licensee No. MB. 0005475; Kansas Licensed Mortgage Company. KS License #MC.0001375; MA Mortgage Broker and Lender License #MC2289"; Minnesota: MN-MO- MN-MO-20183136. This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat. Section 47.206 (3) and (4); Mississippi Licensed Mortgage Company; Licensed by the New Hampshire Banking Department Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker-NYS Department of Financial Services; OH MBA License #2289; Oregon Mortgage Lender License ML-3791; Rhode Island Licensed Broker & Lender; VA: NMLS ID # 2289; Washington Consumer Loan Company License No. CL-2289.