According to the New York Times, mortgages are easy to come by as long as you have superior credit. A recent Ellie Mae analysis found that the average FICO scored of loans closed in August was 734 for approved borrowers, down from an average of 748 last year.
Lenders are also approving more loans for those whose credit scores are below 700, according to Jonathan Corr, the president of Ellie Mae. “About 31 percent of loans in August had scores less than 700, compared to 15 percent a year ago,” he said.
Most of the loosening happened on the refinancing side. Now that these transactions are on the wane, thanks to rising interest rates, lenders may begin to compete more aggressively for purchase business. “The quality of loans right now in terms of underwriting is the highest it’s been in quite some time,” Mr. Corr said. “So I think there is definitely a feeling that there’s some room there. How much lenders decide to do remains to be seen.”Sponsor Content