Banks and Mortgage Lenders are Tightening Credit Standards

If you thought it was tough getting a mortgage a few months ago, you’ll likely be startled to see the underwriting guidelines today.

As of the last few weeks, most banks and lenders have increased their credit requirements across the board on nearly all programs. For example, many mortgage programs that used to call for a 620 credit score now require a 660. Others that required a 660 now require a 680, and so on.

The new credit requirements are just one of many new measures banks and lenders are taking to protect themselves from defaults, foreclosures, and buybacks that have plagued the sub-prime mortgage market, and have all but shattered the entire mortgage market.

But credit scoring has always been an important aspect of the lending process, and one all consumers should monitor closely before and during the loan application process, though nowadays it is absolutely critical to review your credit before applying for a loan.

Today the impact of your credit score on your mortgage can be devastating, to the point where you may not even qualify for a loan. And for those looking to refinance out of an adjustable-rate mortgage, the new credit score requirements may come as a surprise to many who assumed they’d have no problem getting a loan.

What used to be considered good credit is now being reevaluated, as banks and lenders take a closer look at consumers borrowing profiles, and make up for mistakes made over the last several years which created the harsh climate we see today.

Learn more about getting a free credit report.

Related Topics:

1. Credit Score Needed for a Mortgage
2. Which Credit Score Do Lenders Use?
3. FHA Credit Score to Rise
4. Order a Free Credit Report Long Before Searching for a Mortgage
5. Paying the Mortgage with Your Credit Card?