The standards lenders use to determine whether or not a borrower is eligible for a mortgage aren't fixed. That means getting approved for a mortgage can be more difficult at times and easier at others. It also means prospective home buyers can better prepare themselves if they have an idea whether standards are loosening or tightening. The Mortgage Bankers Association tracks mortgage credit availability each month with its Mortgage Credit Availability Index. Any increase in the index means credit has become more available, either because of an increase in loan offerings or a loosening of standards. In October, the index showed a 1 percent increase from the month before.
Joel Kan, MBA's vice president and chief economist, says the improvement was mostly in the market for larger loans. “Mortgage credit availability rose in October, but the growth was driven by increased activity in the jumbo market,” Kan said. “The jumbo index increased by 2.7 percent to the highest level in 14 months – its third straight monthly increase.” Credit availability overall remains tighter than it has been in recent years, as loan offerings have narrowed due to lower demand.