Loans Easier to Get pt. 1
Since the mortgage collapse of 2008 home mortgage loans, for either purchase or refinance, had distinctly become more difficult to come by as a consequence of tighter lending standards. However, according to Ellie Mae, a national mortgage tracking company, data shows that mortgage loans are becoming a little easier to acquire.
Ellie Mae recently released another of their Origin Insight Reports (OIR) in which data, through the third quarter of last year, reveals that both down payments and allowable average credit scores have been dropping modestly for closed mortgage loans. At the same time the report shows that allowable debit limits have been rising slightly.
President of Ellie Mae, Jonathan Corr, stated, “Although it’s not loosening rapidly, we are seeing a consistent loosening that has happened over the last 12 months and in particular since the beginning of the year, in underwriting criteria.”
Relative to credit scores, the report shows that the average FICO credit score for closed loans was 732, this is down from 750 one year earlier. Corr says that the FICO score, which ranges from 300 to 850, is the one mortgage lenders use most.
Along the same line the report also shows that not only did the allowable average credit score dip, but the percentage of borrowers with credit scores under 700 who qualified for loans rose sharply jumping from 17 percent in 2012, to 32 percent in September of 2013.
Corr stated that this figure is important because, “People see a 732 average score and they get worried that they can’t qualify if they don’t have it. But actually, what we’re seeing is the number of folks who have [a credit score of] under 700 and have closed loans jumped quite a bit. That shows a loosening of qualifying standards and gives more people a chance.”