Lenders opening doors to a wider swath of home buyers
Lenders opening doors to a wider swath of home buyers : Do you want to buy a house but worry that your credit profile will disqualify you for a mortgage? Take another look: A new study suggests that you might find lenders a little friendlier and more flexible than you thought. According to the Urban Institute Housing Finance Policy Center's latest quarter He said some lenders are dumbing down on FICO scores as well, soliciting applications with scores in the mid-500s in combination with relatively skimpy down payments and “varying degrees of risk layering.” FICO scores, which are used in most home-loan financings, run from 300 to 850, with the highest risks of future default associated with low scores. Scores below 620 indicate noteworthy credit issues in the borrower’s past. Average FICOs for home-purchase loans acquired by Fannie and Freddie hover close to 750. Within the past 18 months, Meussner said he has seen a sizable jump in loan offerings that contain layers of risk pil...