Black Knight Financial Services just released new findings in its most recent Mortgage Monitor Report that the amount of loans to purchase homes for sale and condos for sale has increased significantly in 2015. The Spring season has the highest recorded level of lending for purchases since 2007.Early findings for the 3rd Quarter signal a growth of 11 percent year-over-year.
Black Knight VP of data and analytics, Ben Graboske believes the improvements are mostly centered around borrowers with higher credit scores. He said, “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.” Mr. Graboske continued, “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.” Furthermore, the average credit score for loan purchases has achieved a new high of 755. The US median credit score is approximately 720 while the average score is 695.
Even though a higher credit score isn’t a necessary qualification to be considered for a mortgage loan, prospective purchases with lower credit scores usually see less unfavorable terms and conditions as compared to borrowers with higher scores. Read more about this here.