From the New York magazine’s July issue: When lenders say their doors are open to homebuyers who don’t have the best credit profiles, should people believe them? Do first-time buyers qualified on income and other key criteria but who happen to have a FICO credit score in the mid-to-upper 600s really have a shot at getting a mortgage?
The answer is probably yes. But the latest statistics on credit scores and mortgages overall are sobering. Not only are average scores on new loans closed by lenders continuing to rise, but there’s growing evidence that large numbers of people with middling credit scores are simply not applying for mortgages. It’s not that they’re getting turned down — they’re self-selecting themselves out of the mortgage market, possibly because they assume their credit scores will get them rejected wherever they apply. In the process, they may be needlessly missing a chance to nail down 30-year fixed interest rates in the mid-3-percent range to buy a home. [more]