Over the many years getting a mortgage has changed, when it comes to credit. I remember the days where your average credit score needed to be 680 to qualify. I recently ran into a person the advised me that the qualifications allow for an average score of 610 now. Its amazing when the boom is on the qualifications seem to be harder, and when the economy is weaker the qualifications seem lighter. This seems to be the case with down payments for mortgages as well. The days weren’t so long ago when the down payment required was 10% or even 20%. It seems now with a 5% down and a credit score of 610 a mortgage is possible. Is this good for the housing market? Is this good for the economy? Should a person be able to qualify for a mortgage with a lower credit score? Is it about the credit score or the ability to pay? Are the banks really that worried, since they will have a house to flog, in case of default? How did the US get to where it is today with credit ratings dropping, economy in a slump, banks refusing to foreclose after years of non payment?
Its easier to get approved for a house then it is a car? Does this make sense? A house is an appreciating value and a vehicle is a depreciating value. This seems to be the answer. Yet an auto loan is sometimes 5% of a homes value. Lenders that approve for a car loan raise the interest rate when they see a collection on the bureau, yet a mortgage company doesn’t seem to care as much.
The credit world is an ever changing one. Learn something new everyday.
Just my 2 Cents