subject: 30% of Americans Fail to Qualify for Lending [print this page] Data from the Zillow mortgage marketplace, which is basically a comparison site platform built into the real estate portal, shows that US citizens with a poor credit score (620 or below) are unable to obtain quotes for 30 year mortgages even when they state their willingness to pay deposits of over 15%
Data from MyFICO.com tells us that almost a third (29.3%) of Americans have a credit score of less than 620, which means that the data shows that a third of American's are unable to even get a mortgage quote on the platform.
This is one of the clearest indications yet of just how tight mortgage lending in America has become. It is easy to say, especially when you read about the repossession figures; well you can't really blame the banks.
But you can, credit became way to easy during the boom, and not just in America. People were not only able to borrow 100% of a property's value that was too expensive for their wages, but they could even get a few thousand or tens of thousands on top to decorate or buy a new car. Now they have battened down the hatches, and are attempting to bury our heads in the sand while they digest the massive numbers of bad loans they are faced with.
For the 47% of Americans with good credit scores, mortgage finance is available very cheaply because of the record low interest rates. The average APR being offered to Americans with credit scores of 720 and above is just 4.3%.
"We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home value declines, homes are more affordable than we've seen for years. But the irony here is that so many Americans can't qualify for these low rates, or can't qualify for a mortgage at all," said Zillow Chief Economist Dr. Stan Humphries.
"Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble. Today's tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand, which is important for the greater housing market recovery."
30% of Americans Fail to Qualify for Lending
By: Les Calvert
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