It’s easier than it has been in several years to qualify for a mortgage, thanks to eased credit score requirements. According to a recent article in the Spring Real Estate Guide in the Money publication, there has been a 15% increase since 2014 in the number of refinance applications approved.
Impacting the approval rate is the fact that the average FICO credit score required for a 30-year mortgage has dropped 10 points. In fact, borrowers with an average score of 695 might be able to qualify for a mortgage, which hasn’t been the case for years.
Additionally, those with a higher than average credit score (750-800) might find themselves qualifying for rates in line with borrowers with “excellent” credit (800 or above); the gap in the rate difference might now be close to zero.
More accessible mortgages, coupled with near record low mortgage rates make this an excellent time to secure a mortgage or refinance.
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Despite the Federal Reserve rate increase late last year, the 30 Year Mortgage rate has continued to decrease. It has been predicted, in fact, rates could “head lower into record territory”. Nonetheless, Fannie Mae has just reported its worst monthly home purchase sentiment in 18 months.
A recent article on CNBC.com’s Realty Check outlines some of the reasons home sales have been on the decline so far this spring. For example, many buyers and sellers do not believe that this is the best time to purchase or sell a home. Consumers are concerned about the economy and job security; to add, mortgage credit availability has tightened.
The release of key domestic economic data this week could have an impact on the direction of the mortgage rates.