There are reports with the end of the refinancing boom lenders are making it easier for home buyers to get a mortgage.
In a survey conducted by Ellie Mae, who reviews loans with a nationally representative sample, their August report indicates a gradual easing on credit scores for borrowers.
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According to their survey 30 percent of all successful applicants for home mortgages had credit scores less than 700. This is an increase of 15 percent from a year ago. Fannie Mae and Freddie Mac scores for approved applicants dropped one point from July to August to 758 which is down from 764 at the end of last year.
Many lenders are seeing refinance applications decline, and this may be pushing them to be more flexible and competitive on loans for home purchases.
One example of a major lender loosening up is Wells Fargo which has lowered its minimum down-payment requirements on jumbo mortgages. Rather than its previous minimum of 20% down, Wells is now accepting 15% on primary residences.
Here at MagnumOne Realty, as we work with buyers, we have not seen any easing in lending standards. It still seems like some of the large lenders work too hard finding ways to say no. We recently lost a sale because Wells Fargo refused to fund after all the documents were signed. This was done as a result of discovering a 19-year old judgment filed against the applicant.
Even if credit score requirements are more flexible than a year ago, and jumbo loans require less cash out of pocket, we are still in a highly restrictive lending market.
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