Mortgages with lower credit scores
You may have heard that it's hard to get a mortgage unless you have perfect credit. But in reality, lenders seem to be loosening their credit standards.
The average credit score for mortgages that closed in August was 727, according to Ellie Mae's latest origination insight report. That's still a high score, but it's much lower than the 750 average seen a couple years ago. For mortgages that closed in August 2013, the average credit score was 734.
For loans backed by the Federal Housing Administration, or FHA loans, the average score of loans closed in August was 682. It was 697 in April 2013.
"The numbers have been going down pretty consistently through most of 2013 and the first half of 2014," says Jonathan Corr, president and chief operating officer for Ellie Mae. "We are definitely not going to go back to the '06 time frame, but we'll go back to a normal market."
That's especially true now that lenders have a much lower volume of refinance applications and have to work harder to attract borrowers.