A Columbia SC home mortgage is still too hard to get, according to Federal Reserve Chairman Ben Bernanke. The Fed Chair discussed housing and mortgage finance at the Hope Global Financial Dignity Summit in Atlanta.

The Columbia SC housing market has been experiencing signs of recovery this year, but according to Bernanke, it’s far from out of the woods. Weak construction numbers remain a drag and “7% of mortgages are either more than 90 days overdue or in the process of foreclosure,” he added.

The Fed chief also pointed to tighter lending conditions for a home mortgage as a factor in the housing slowdown.

Columbia SC Home Mortgage Tightening Has Gone Too Far

“Lenders began tightening home mortgage credit standards in 2007 and have not significantly eased standards since,” the chairman said, citing the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices. “Terms and standards have tightened most for borrowers with lower credit scores and with less money available for a down payment.”

Bernanke said some tightening was warranted after the housing crisis, but added “it seems at this point the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes.”

Bernanke’s statements showed a Fed Chairman who is well aware of the push-pull that is creating conflict in the home mortgage market.

On one hand, federal regulators and new laws are trying to prevent unnecessary foreclosures and ensure a stable housing market. On the other hand, Bernanke realizes lending institutions are delaying the origination of certain loans because they fear new regulations and potential putback claims associated with today’s new regulatory landscape.

To a larger degree, the Fed chairman blames the slow housing recovery on unemployment issues since a loss of income generally forces citizens to avoid homeownership altogether.

Underwater borrowers also remain trapped, making it difficult for them to stimulate new market activity.

“The fall in home prices means that many current homeowners cannot rely as much as they could in the past on tapping their existing home equity to trade up to larger or better homes, while underwater homeowners may be financially unable to move from their current homes,” Bernanke said.

For more on Columbia SC home mortgage information, click the Columbia SC Mortgage Info category to the right.

Many types of Columbia SC home mortgages — such as the “payment-option” loan — have disappeared in the wake of the housing bust. But homebuyers and homeowners who want to refinance still have several types of loans from which to choose.

The most basic choices include: fixed-rate mortgages, adjustable- or variable-rate mortgages and hybrid mortgages (which combine features of both the fixed- and adjustable-rate options).

Fixed-Rate Columbia SC Home Mortgages

The fixed-rate mortgage is a popular choice for homebuyers and homeowners because it offers peace of mind that the interest rate and monthly payment will remain unchanged for the entire term of the loan, typically 15 or 30 years. A fixed-rate loan with a 30-year term will have a slightly higher interest rate, but a significantly lower payment than a fixed-rate loan with a 15-year term.

Adjustable-Rate Columbia SC Home Mortgages

The adjustable-rate mortgage, or ARM, gives the borrower a lower initial interest rate and a payment that may be more affordable than the rate and payment on a fixed-rate home mortgage. However, the borrower should be prepared for the possibility that the low initial interest rate and payment on an ARM may not last. That’s because the rate and payment on an ARM typically adjusts — either higher or lower — according to a well-established interest-rate index, such as Libor. Rate adjustments often are subject to certain caps that limit the amount of the increase.

Hybrid Columbia SC Home Mortgages

Hybrid Columbia SC home mortgages come in two configurations. One format starts out with a low initial adjustable interest rate that makes the payment more affordable, and then converts to a fixed market rate — which may result in a higher payment — after a set number of years. The other format starts out with a fixed rate and payment for a set number of years, and then converts to an ARM, on which the payment may be either higher or lower, depending on market interest rates. These loans are popular among homebuyers who intend to sell the home or refinance the mortgage, if possible, before the adjustment occurs.

One other type of Columbia SC home mortgage is an interest-only loan, on which the borrower makes a lower payment, but none of amount is applied to the principal balance.

When trying to decide which Columbia SC home mortgages are right for your particular situation, it’s advisable to talk to more than one lender so you get the financial version of a “second opinion.”