Credit Scores & Getting a Mortgage

Several years ago your credit score didn’t have as much weight with getting a mortgage. In reviewing credit worthiness of a mortgagor (Borrower), underwriters could make an independent decision based on one’s past payment histories.

But that has changed in recent times

Lenders realized the relationships between historical credit scores and mortgage delinquencies. For example, just about half of borrowers with scores below a 550 became 90 days delinquent at least one time in their mortgage period. Conversely, only two out of every 10,000 mortgagors with scores above 800 became delinquent on their mortgages.

Because of that relationship, lenders took a closer look at scores and found the probabilities of delinquencies to specific scores.

Credit Score

Chances of Delinquencies

595

2.25

to

1

615

9

to

1

630

18

to

1

645

36

to

1

660

72

to

1

680

144

to

1

700

288

to

1

780

576

to

1

These are reasons for today’s tougher mortgage lending standards

Speak Your Mind

*

%d bloggers like this: