Archive for the ‘can’t get mortgage’ Category

Almost 1/3 of American’s Can Not Qualify For A Home Loan

Tuesday, September 28th, 2010

According to a recent analysis conducted by Zillow Mortgage Marketplace, nearly one third of all American’s today are unable to qualify for a 30 year fixed home mortgage. Zillow looked at nearly 25,000 cases of loan quote requests on their website from the beginning of September. Those asking for quotes whose credit scores were 620 or less, even when they had a substantial down payment of 15% to 20%, were turned away. MyFico.com reports that nearly 30% of all Americans have scores 620 or less and these individuals will find it virtually impossible to qualify for a home mortgage.

For the other 2/3 of American’s it is still a great time to buy a home or remortgage with interest rates at record lows. Zillow also reported that those who applied who had stellar credit scores above 720, on average, were able to secure a 4.3% interest rate for a 30 year fixed mortgage. Those with credit scores above 620 up to 719 were also able to receive very good rates averaging between 4.44% and 4.73%. The lower their credit score the higher the interest rate.

Zillow each month receives loan requests from people all over the country looking to secure a home loan. On average they receive over 3000,000 requests each month. Those looking to secure a mortgage can come to the site and request mortgage quotes from lenders all in one place. Once a request has been received lenders can then offer a loan package to the potential borrower customized to fit their needs. What Zillow discovered when doing this analysis was that those looking to secure a home loan with credit scores under 620 were not receiving any loan quotes.

According to Zillow.com chief economist :

“Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble,” said Humphries. “Today’s tighter credit is a predictable response by banks after the foreclosure crisis.”

American’s with low credit scores looking to buy a home will need to work on improving their score. They should get a copy of their credit report, make sure that it has no errors and then work on steps to increase their score.

It also rejected approximately 70% of the applicants who earned close to 800 on the math and critical reading sections of write an essay the sat