According to Black Knight Financial Services’ latest Mortgage Monitor Report, the number of loans to buy homes has risen significantly this year. In fact, this spring saw the highest level of purchase lending in eight years and early numbers for the third quarter indicate a year-over-year improvement of 11 percent. Ben Graboske, vice president of data and analytics at Black Knight, says the gains are almost entirely concentrated among buyers with higher credit scores. “Year-over-year comparisons of purchase originations from sub-700 credit score borrowers show that purchase volumes from lower-credit borrowers are actually flat to slightly down from last year’s level,” Graboske said. “Only 20 percent of purchase loans originated in the past three months have gone to borrowers with credit scores below 700. That’s the lowest level we’ve seen in well over 10 years.” In addition, the average credit score for purchase mortgages has reached an all-time high of 755. The median credit score in the U.S. is about 720; the average score is 695. Though a high credit score isn’t required to qualify for a mortgage, prospective buyers with lower credit scores generally will receive less favorable terms than those with higher scores. More here.
