Today’s consumers face a challenging mortgage environment as compared to the environment 5 years ago. There are several reasons for this. Today’s minimum FICO score requirements are higher by up to 100 points and mortgage applicants also face more income scrutiny and are required to better demonstrate their ability to make payments. Lending standards have also tightened and it is generally more difficult to get approved for a mortgage today than it was earlier in the past decade.
However, as the economy improves, some U.S. banks have begun to loosen mortgage lending standards. Standards have generally tightened over the past few years, but the Federal Reserve recently reported last quarter that no “big banks” increased mortgage standards and some banks even had easier standards.
This data comes from the quarterly Federal Reserve survey, which gauges consumer demand for loans and banks’ willingness to meet the demand. Almost all surveyed banks reported an increase in mortgage demand due to low mortgage rates last quarter. As many consumers wanted to buy or refinance homes last quarter, 6% of big banks reported that their credit standards were somewhat loosened. The other 94% said their standards were left unchanged.
As today’s low mortgage rates make homes more affordable, it may be a good time to commit as banks begin to loosen their mortgage lending standards. Sammamish Mortgage is one of the best Bellevue mortgage companies you can speak with to find out about the latest loan standards. We will answer your questions and give you tips on how to improve your credit so you can get the home of your dreams!