FICO® Scores on Approved Home Loans Drop Again

In today’s competitive market it is is more important than ever for a buyer to obtain a pre-approval. If you have been considering purchasing a home a home, the first step is to connect with a great lender. It will save you time and effort and will help determine how much home you can qualify for. It also lends credibility to your offer. In local markets with tight inventory and a saturated buyer pool, only the most competitive offers with pre-approvals make it to the table. Even if you think your credit is not high enough, you should speak to a lender. The good news is, the FICO scores on approved home loans have recently dropped.

According to Ellie Mae’s latest Origination Report , the average FICO® Score one all closed loans dropped to 722 which is its lowest mark since April. The average includes all approved refinance and purchase loans.

FHA and VA loans showed the most opportunity for millennials looking to enter the market with low down payments and even lower FICO® Score requirements.

Ellie Mae’s Millennial Tracker revealed that those who purchased homes in December with an FHA Loan were able to do so with an average down payment of 4% and a FICO® Score of only 684.

Joe Tyrell, EVP of Corporate Strategy at Ellie Mae commented on the opportunity this brings to buyers,

“With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market.”

Bottom Line

More and more potential buyers are able to qualify for a mortgage loan now! Have mortgage questions? Need a referral for a good lender? Not sure where to start? If you are debating a home purchase, let’s get together and evaluate your ability to buy today! Contact me here!