The refinance market is drying up and lenders are looking to ease credit requirements on new loans, but they may struggle to find customers.
By looking at 225,000 purchase loan requests and 13 million quotes in its mortgage marketplace on 30-year mortgages from Sept. 1-15, Zillow found that borrowers with credit scores under 620 — representing approximately 28 percent of Americans according to myFICO.com — and offering between 15 and 25 percent down payments were unlikely to receive even one quote.
Compared to a similar analysis in September 2010, Zillow found that the minimum FICO score needed to get the best mortgage rate jumped from 720 to 740. Currently, more than 40 percent of Americans have FICO scores greater than 740.