This is my second installment offering a rationale for the statement "2012 Is the Year for Home Buyers" in the greater Santa Cruz area.

For the past few years, home prices and mortgage rates have been historically low, and affordability has been historically high. Buyers may have become a bit complacent because of how unchanging this situation seems to be.

Having been in the industry over a decade I’ve seen variations of this article referring to the 4 C’s of Mortgage Underwriting (Capacity, Credit, Cash, Collateral). While it gives a potential borrower a broad understanding of what a lender looks for in “qualifying” one for a loan, it neglects to address the more critical point of “affordability.”

And not just borrowers. Anyone party to a home purchase including buyers, sellers and their Realtors. It may be the difference between having a smooth transaction or not, or even getting it done at all.

Mortgage Rates jumped considerably this week (about .25%). I’d call it considerably, but considerably compared to what? Considerable in this case means “when it causes disorientation to clients and mortgage lenders alike.”