It appears that banks are quickly adapting their policies to the current darkening economic outlook. In the US, the country’s fourth-largest lender – JP Morgan, is raising its mortgage borrowing standards as a response to the situation.
JP Morgan Raising Mortgage Borrowing Standards
Borrowing money against a mortgage will be harder for US citizens starting tomorrow, April 14th. This became clear as the country’s fourth-largest lender, JP Morgan, was reported to increase its mortgage borrowing requirements.
As soon as the change takes place, customers will need a credit score of at least 700 to qualify for a mortgage loan. On top of this, they will also be required to make a down payment of at least 20% of the home’s value.
“Due to the economic uncertainty, we are making temporary changes that will allow us to more closely focus on serving our existing customers.” – Said Amy Bonitatibus, Chief Marketing Officer at JP Morgan Chase’s home lending business.
Reportedly, these changes should help the bank reduce its exposure to borrowers who lost their jobs unexpectedly or whose homes decline in value during the current economic crisis.
It’s worth noting that the bank won’t disclose its current minimum requirements. However, according to MBA, the down payment across the housing market is around 10%. At the same time, the new standards won’t apply to existing mortgage customers or to low and moderate-income borrowers as long as they qualify for its “DreaMaker” product that requires a 620 credit score and 3% down payment.
Mixed Opinions Regarding The Longer-term Impact On Cryptocurrencies
Naturally, the first question that pops to mind is if this would have an impact on traditional investors and those who spend on cryptocurrency. It’s hard to make a relation, but logic dictates that the higher standards won’t make it easier for people to put money aside in risky assets such as crypto or even some stocks.
Speaking to CryptoPotato was Thor Chan, CEO at AAX Exchange, who shared his thoughts on the upcoming price action in the crypto market.
According to him, this year “will see the most interesting and significant price action that we’ve seen in a long time. The upcoming Bitcoin halving event drives expectation among crypto enthusiasts, institutional investors are fighting other battles but are aware of how the halving affects sentiment, and at the same time the global economy is under attack with inflation bound to take place – this means it will become less and less attractive to sell your Bitcoin holdings when prices start to soar.”
Chan believes that Bitcoin will hit $12,000 by the middle of June, and he also sees a significant rally that might “see prices return to Bitcoin’s all-time high, settling at around $17,000 towards the end of the year.”
Unlike Chan’s thoughts, other opinion leaders see Bitcoin positively correlating with other assets as the global markets. Therefore, if the crisis expands and stocks will crash lower, we can expect Bitcoin and cryptocurrencies to follow and plunge.