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 making it easier for homebuyers to qualify for a mortgage.
The Credit Accessibility score is benchmarked at 100, using data from the full year of 2012, which is where it stood in June.
As mortgage rates rise and the refi boom cools, purchase loans are accounting for a larger piece of the mortgage loan origination pie than refinancings. As this occurs, lenders are likely to get more aggressive about competing for business from homebuyers, loosening their underwriting standards in the process.
As interest rates 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.
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