Online mortgage originator LendingTree’s monthly Credit Accessibility Report shows the average accessibility score for U.S. borrowers rose from 103 to 106 between July and August, indicating that borrowers had easier access to mortgage credit.
The Credit Accessibility score is benchmarked at 100, using data from the full year of 2012, which is where it stood in June.
In what might be good news for Realtors but bad news for lenders, purchase loans will soon account for a bigger piece of the mortgage loan origination pie than refinancings, a recent report by Ellie Mae suggests. As mortgage rates rise and the refi boom cools, lenders may get more aggressive about competing for business from homebuyers, loosening their underwriting standards in the process.
As home prices rise, refinance activity slows and government programs change, potential borrowers are, in fact, finding it easier to gain access to credit, LendingTree CEO Doug Lebda said in a statement. That’s because lenders are easing up on down payment and credit score requirements, while still adhering to conforming loan guidelines.
As private securitizations of mortgages not backed by the government start to bounce back, “borrowers who didn’t qualify in the past may now have that opportunity,” Lebda said.