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Lenders Lower FICO Score Standards, Help Home Loan Hunters

Lenders have a bit of a Mona Lisa smile as spring home loan shoppers begin to house hunt in Florida.  According to the Mortgage Report, “it looks like mortgage Lenders are loosening their credit standards a bit.”  The relaxing of the standards can be traced in Ellie Mae’s Data.

“November saw the average buyer FICO score drop two points over October.  FICOs also dropped on refinance loans across the board.”

In plain language, what does this mean?  Basically, some folks that might not have been approved by Lenders previously, became eligible for their loans because Ellie Mae relaxed her loan approval criteria a bit.

What’s in your Wallet?

Lenders standards ease

Check your credit. You might be pleasantly surprised.

If you don’t know where you stand, you might verify your new rate at an online calculator like this one, updated today by Ellie Mae.

Enjoy the data, but note they do endorse certain Lenders in general.

(At Palm State, we operate a little differently, and a little more individualistically.)

We’ll shop around to find you the best offers and lenders for your fiscal situation.

However, numbers do not tell the whole story, and we recommend you give a call to your favorite mortgage broker, Palm State Mortgage.

And also check the latest news.  This is especially true if you are house hunting in the Winter Park area.

Lender Love:  Ellie Mae’s Magic Words for Home Loan Shoppers

Although we at Palm State would love to fill this blog with human interest stories as we begin a new week, we feel that our house hunters, new and veteran, might be craving a quick orientation to House Hunting 101 and Lender Seeking 101.  It’s time for “Back to Basics.”  So let’s take a quick look at some of Elie Mae’s basic vocabulary. 

The terms are not near as mysterious as Mona Lisa’s smile or that sweet new drop in FICO requirements:

  1. Closing Rate: Percentage of loan applications begun in the previous 90-day cycle that have closed.
  2. Debt-To-Income Ratio:  Lenders check you out based on this information.  We have blogged previously about this term.  Your DTI is basically a “personal finance measure that compares an individual’s debt payments to the income he or she generates.  Includes front-end ratio/back-end ratio.”  Check out our previous article on this simple term and learn how much house you can really afford to buy before you fall in love with a certain home.
  3. Time To Close:  Put simply, this is the time from loan application to funding.
  4. Refinance:  If you already have a home, but you seek lower payments, you’ll love checking out our previous comments on this topic. It includes both no-cash-out and cash-out refinances.
  5. FICO:   This acronym refers to a type of credit score. The FICO encompasses a large part of the credit report on you.  Lenders use it to make judgments.  They will use it to assess the risk involved in determining whether to extend a loan.  The acronym indicates the Fair Isaac Corporation.  They are the creators of the FICO score.

From the Ellie Mae Origination Insight Report to You, With Love

By the way, if you feel credit-shamed, Ellie Mae wants you to know they look “at the average middle score from a tri-merge credit

Learn about your credit abilities before you jump into your house buying hunt.

Families Learn About Credit Together.  

report.”

6. The Loan To Value Ration (the LTV):  This is a lending risk-vs.- “assessment ratio that financial institutions and other lenders examine before approving a mortgage.”

The Formula is calculated by dividing the mortgage amount by the appraised value of the property.

Take Courage. With a little focus on your mortgage acquiring vocabulary, your journey to secure a loan and buy a home will go more smoothly.

About That Lower FICO score?

Ellie Mae’s data, linked above from November Origination Insight Report, states that “the average FICO score across all loan types dropped from 724 to 722 for the month.”  If we go back a year it is also down 9 points from September.

Borrowers and Lenders Wonder:  In Today’s Economy, What is a good FICO score?

Lenders have relaxed some standards, so families have better options on the FICO score.

Excited Family Explores New Home On Moving Day.

So far this year…

1.   33 percent of buyers smiled because they had FICO scores in the 750 to 799 range,

2.   24 percent owned scores between 700 and 749, which is still impressive.

3.   and 20 percent have scores of 650 to 699.

4.   About 9 percent had a FICO of 600 to 649,

5.   and 13 percent had above-800 scores.

Today’s Terrific Take-Away:  A Little more Data or “Let’s see how buyers are shaping up their credit scores.”

Palm State Mortgage will soon be bringing you more information about credit scores, lenders and their ways, and shopping for your first home.

There are exciting spring days of joyous house-hunting ahead.  So don’t miss our part II featuring a little more about FICO plus more mortgage news next week!

2018-04-15T15:55:18+00:00 April 15th, 2018|