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Home Loans Getting Easier to Obtain

SPRINGFIELD, Mo. -- It's becoming easier to get a home loan across the country because financial requirements are becoming more relaxed.
SPRINGFIELD, Mo. -- It's becoming easier to get a home loan across the country because financial requirements are becoming more relaxed.

Your dream home might become a reality, even if you don't have the typical 20 percent to put toward a down payment.

"There are more investors who are opening back up the channels for the 5 percent down type loans," Mortgage Banker Kent Kelso said.

Kelso said lending practices are becoming a bit more relaxed.

"We're starting to see them allow things today that they didn't allow six months ago or three months ago for that matter," Kelso said.

There is a big-picture reason for the shift in the market.

The major banks are seeing fewer and fewer loans being processed, which means less business.

"Nationally there was 2.1 trillion dollars worth of mortgages originated in 2012. Next year they are projecting it will contract to about 1.1 trillion," Kelso said.

That reduction means they're lowering required credit scores and money down.

But more relaxed requirements also bring up red flags for anyone who remembers the housing bubble burst in 2008.

"In the early 2000s it got a little loosy-goosy with the automated underwriting," Kelso said.

We asked Kelso if he believes history will repeat itself.

"No, as long as prudent lending guidelines are in place," he said.

He believes many bad lending practices are gone.

"They were doing 100 percent loans for people with 580 credit scores and stated income, no that doesn't exist anymore," he said.

So even as lenders open the gates, Kelso believes the past won't repeat itself and this could be good news for those looking to buy.
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